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INVESTOR PRESENTATION June 2020
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 historical or anticipated results depending on a variety of factors. These risks and uncertainties include, but are not limited to, the impact of the continuing financial and operations uncertainty due to the COVID-19 pandemic, including its impact on the overall economy, our sales, customers, operations, team members and suppliers. Further information concerning the Company and its business, including factors that potentially could materially affect the Company’s financial results, is contained in the Company’s filings with the Securities and Exchange Commission. This presentation includes market and industry data, forecasts and valuations that have been obtained from independent consultant reports, publicly available information, various industry publications and other published industry sources. Although we believe these sources are reliable, we have not independently verified the information and cannot make any representation as to the accuracy or completeness of such information. We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this presentation or to reflect any change in our expectations after the date of this presentation or any change in events, conditions or circumstances on which any statement is based. Use Of Non-GAAP Financial Measures This presentation contains non-GAAP financial measures. These measures, the purposes for which management uses them, why management believes they are useful to investors, and a reconciliation to the most directly comparable GAAP financial measures can be found in the Appendix of this presentation. All references to profit measures and earnings per share on a comparable basis exclude items that affect comparability. Investor Presentation 2
COMPANY OVERVIEW & HIGHLIGHTS Investor Presentation
KEY MESSAGES 01 02 03 04 05 Market leader in Leadership team Flexible, high Disciplined cost Strong balance our primary with deep industry variable cost management sheet with no market sectors; experience and business model to balanced with near-term debt uniquely proven track drive operational strategic growth maturities, ample positioned for record of efficiency and investment liquidity and an near- and long- successfully navigate through opportunities enhanced capital term shift toward navigating all economic structure outdoor activities economic cycles conditions Focused on Creating Long-term Shareholder Value Investor Presentation 4
PATRICK INDUSTRIES AT A GLANCE (NASDAQ: PATK) Key Component Manufacturer and Supplier to RV, Marine, Manufactured Housing and Industrial Markets KEY FACTS SUSTAINABLE COMPETITIVE ADVANTAGES Founded 1959 Experienced management team with an average of 20+ years of industry experience Headquartered Elkhart, Indiana Leading market position in all product categories Market-cap* $1.2B Deep customer relationships with 30+ years for top customers, including key design partners Facilities ~170 Stable Free Cash Flow (FCF) generation Current States Presence 23 Favorable demographic trends supporting growth across multiple end markets Employees ~7,000 Diversified end market exposure with favorable secular trends Q1’20 LTM RESULTS LEADING AND DIVERSIFIED MARKET PLATFORM Revenue $2.3B Leisure & Lifestyle Housing & Industrial RV Marine MH Industrial Net Income $90MM Travel Trailer, Pontoon, Manufactured and Resid. Housing, Fifth Wheel, Fiberglass, Ski & Modular Housing, Comm’l Fixtures, Folding Trailer, Wake, Aluminum Modular Structure Institutional Operating Cash Flows $178MM Class A, B, C Furniture *Market-cap as of 6/01/2020 Manufacture and Distribute Quality Products that Exceed Customer Expectations Investor Presentation 5
SUCCESSFULLY TRANSFORMED OUR BUSINESS Transformed through acquisitions into a scaled and diversified value-added player across multiple end markets, positioning the Company to perform well through the cycle 2007 2019 Revenue $370MM $2,337MM Gross Margin 11.9% 18.1% Adj. EBITDA / % of $6MM / 2% $250MM / 11% Revenue Free Cash Flow $20MM $165MM 12% 25% RV RV 39% MH 19% Marine 55% MH Revenue by Segment Industrial 14% 36% Industrial Highly-scaled Strong cash flows Small-scale Weak cash flows Geographically diversified throughout Ample liquidity Geographically centralized in Midwest Limited liquidity U.S. Enhanced capital structure Serving RV & MH markets Restrictive capital structure Serving RV, Marine, MH and adjacent Company Summary industrial markets Key Capabilities & Commodity-based, lower margin product lines Value-added, higher margin products, plus legacy product lines Product Portfolio Laminated decorative wall and ceiling panels Plastics / thermoforming Wrapped mouldings, stiles and battens Furniture and sourcing / specialty bath, shower and closet systems Hardwood doors Solid surface / granite / quartz countertops and fabrication Slotwall and components, drawer sides Metal fabrication / fuel tanks Aluminum extrusions Fiberglass component products / tooling / hulls / engineering and design Warehousing / distribution / logistics / comprehensive design center Full and partial body paint / FRP and aluminum sidewalls Electrical / wiring solutions / harnesses / instrument panels / lighting Hardwoods / softwoods / cabinetry Investor Presentation 6
EXPERIENCED MANAGEMENT TEAM Andy Nemeth John Forbes Kip Ellis Jeffrey Rodino Courtney Blosser President & Interim CFO EVP – Operations EVP – Sales & EVP – Human CEO 2020; Patrick Board & COO CSO Resources & CHRO Joined: 1996 Member since 2011 2016 2009 2009 o Average management team industry experience of 20+ years, spanning multiple economic cycles o Senior leadership team managed the Company through the last recession and have subsequently transformed the Company o Given deep industry experience, management team has proactively identified additional levers to pull if economic conditions change Investor Presentation 7
STRATEGIC END MARKET OVERVIEW Sales Composition ($MM) Lifestyle & Leisure Housing & Industrial RV Marine MH Industrial Net Sales (LTM as of 3/29/20) $1,265MM $316MM $443MM $294MM $2,337 $2,318 $2,263 Areas of Expertise 12% 13% Lamination/Custom Components ✔ ✔ ✔ 13% Hard/Softwoods Cabinetry ✔ ✔ ✔ 12% 19% 19% Thermoforming/ Plastics ✔ ✔ ✔ ✔ $1,636 Countertops & Fabrication ✔ ✔ ✔ 11% 12% 14% 14% Metal Fabrication / Fuel Tanks ✔ ✔ ✔ 13% Electrical Systems & Wire Harnesses ✔ ✔ ✔ ✔ 7% Electronics & Appliances ✔ ✔ ✔ ✔ Full Body Paint ✔ 63% Wiring ✔ ✔ ✔ 55% 54% 69% Marine Canvas & Towers ✔ Fiberglass ✔ ✔ ✔ ✔ Distribution & Design Center ✔ ✔ ✔ 2017 2018 2019 LTM Geographic Reach & 3/29/20 Industry Concentration RV Marine MH Industrial Portfolio of Products are Highly Leverageable Across Business Lines Investor Presentation 8
LEADING MARKET POSITION IN ALL PRODUCT CATEGORIES Significant organic growth opportunities with current product categories in RV, Marine and MH markets; addressable industrial market is very large and fragmented, resulting in significant growth opportunities Recreational Vehicle Marine Primary Market: ~$4.0B | ~39% Market Share Primary Market: ~$1.9B | ~17% Market Share (Calculated on a TTM basis) (Powerboat Retail Unit – Calculated on a TTM Basis) $9,000 $8,000 $3,131 $3,112 $1,617 $1,847 $2,063 $2,414 $1,484 $1,531 $24 $116 $218 $689 1Q15 1Q16 1Q17 1Q18 1Q19 1Q20 Total 1Q15 1Q16 1Q17 1Q18 1Q19 1Q20 Total Potential Potential o 100% market share in our existing products would yield a total potential o 100% market share in our existing products would yield a total potential content/unit of $8,000 content/unit of $9,000 o 1% decline in TTM content per unit – Q1’20 vs. Q1’19 TTM o 3% growth in TTM content per unit – Q1’20 vs. Q1’19 TTM Manufactured Housing Industrial Primary Market: ~$1.05B | ~41% Market Share N/A (Calculated on a TTM basis) $11,000 Q1’20 Revenue - $78.6MM vs. $4,543 $1,718 $1,787 $2,015 $2,382 $3,415 Q1’19 Revenue - $69.0MM 1Q15 1Q16 1Q17 1Q18 1Q19 1Q20 Total Potential o 100% market share in our existing products would yield a total potential o 60% of Patrick’s industrial sales are linked to the residential housing market content/unit of $11,000 o Addressable market opportunities in residential (both single and multi-family), o 33% growth in TTM content per unit – Q1’20 vs. Q1’19 TTM commercial high rise, big box retail, office furniture and hospitality / schools Investor Presentation 9
CLEAR STRATEGIC PATH FORWARD FOR PROFITABLE GROWTH Pursue Execute Disciplined Focus on Exercise a Prudent Organic Growth Acquisition Strategy Geographic Expansion Financial Policy o Invest in internal growth o Leverage fragmentation in o Leverage existing product o Use strong cash flow to via cross-selling, product our core markets and capabilities, relationships, reduce debt and reload line extensions driven by achieve meaningful growth and expertise growth capacity brands, deep industry at a competitive price relationships, and using o Increase collaboration with o Long-term target leverage comprehensive design and o Diversify our end market regional manufacturers to ratio of ~2.00x – 2.25x innovation center exposure lower cost o When below target o Devote capital to strategic o Drive gross and operating leverage and ample FCF is infrastructure to drive margin expansion through available, return value to efficiency and capacity value-add products and shareholders through realization of input cost share repurchases on an o Identify and realize synergies opportunistic basis synergistic cost saving initiatives to increase FCF Investor Presentation 10
INCREASED FOCUS ON ESG RESPONSIBILITIES AND BEST PRACTICES Environmental o Established transportation / resource usage program to reduce costs, fuel consumption and emissions o Build leading safety culture with continuous improvement and training o Ongoing conservation efforts to reduce waste, recycle chemicals and increase energy efficiency Social o Assess product suppliers for environmental & social responsibility o Support numerous charitable organizations in local communities: ‒ Elkhart Community Foundation ‒ RV industry production associate skills training program ‒ Boys & Girls Clubs in Elkhart and neighboring towns o Recruit new college graduates for 3-year IMPACT Leadership Development Program Governance o Experienced and diverse board with an independent lead director; 78% independent members; 33% gender & ethnic diversity o Annual election of all directors o Single class voting structure o Code of Ethics and Business Conduct for all employees and directors Focused on ESG to Drive Long-term Shareholder Value Investor Presentation 11
COVID-19 RESPONSE AND UPDATE Investor Presentation
OUR STRATEGIC RESPONSE TO THE COVID-19 PANDEMIC COMPANY-WIDE ACTIONS Health Supporting Cost Containment Operational and Safety Our Communities and Financial Measures Efficiencies Created COVID-19 Task Force Donating PPE to hospitals, Voluntary compensation Suspended operations at and Business Unit Champions care centers and front-line reductions by the executive certain facilities over a five- to provide continued responders management team week period in alignment with awareness, training and customer demand education Sponsoring meals for local Voluntary reduced hospitals and frontline COVID- compensation for the Board of Furloughed team members Implemented social distancing, 19 workers Directors with benefits impacted by strict sanitation practices and suspended operations PPE measures Temporary shifting of Wage reductions for salaried manufacturing focus at certain team members across the Consolidating certain facilities Applied protocols in alignment facilities to produce plastic organization with like product lines with both CDC and state face shields, masks and guidelines isolation gowns Freeze on all non-essential hiring Encouraged work from home program as applicable Fixed cost reduction of $35MM Eliminated non-essential travel Reduction of non-essential spending Implemented “Return to Work” protocols Suspended acquisition activities and paused share repurchases Investor Presentation 13
WELL POSITIONED FOR THE NEAR- AND LONG TERM Great Recession Response to Recession Better Positioned Today o Portfolio consisted of commodity- o Aggressive fixed cost reduction and o Engineered, value-added, brand- based product lines consolidated certain operations centric product portfolio o Low margin profile o Divestiture of non-core assets o Higher margin profile o Little scale and diversification o Streamlining of administrative and o Highly scaled / market & support activities geographically diversified o Geographically centralized in Midwest o Targeted margin accretive o Highly variable (>80%) cost structure o Weak cash flows acquisitions – post recovery o Flexible manufacturing process o Limited liquidity and restrictive capital o Market and geographic diversification structure o Asset light and not capital intensive o Added liquidity and enhanced capital o High leverage heading into recession o Ample liquidity and enhanced capital structure structure o Maintain disciplined financial policy Operations & Short-term Outlook o Rolled out “Return to Work” protocols for re-opening of all facilities by May 4, 2020 $35MM Additional Cost Savings o Anticipate significant short-term disruption in all end markets in the second quarter, followed by sequential improvement through the back-half of 2020 Identified o Leverage high-variable cost model and flexible manufacturing capabilities – shifting production to Eliminated annualized fixed match demand throughout various plants and geographies as necessary overhead (effective Q2’20) Consolidate certain like-product o Consolidate certain like-product based facilities as appropriate to maximize efficiencies, capacities facilities and synergies Investor Presentation 14
DOWNTURN PLAYBOOK FLEXIBLE COST CONTAINMENT ADDITIONAL BUSINESS MODEL ACTIONS TAKEN LEVERS AVAILABLE o High variable cost model Voluntary wage reductions for o Fixed overhead reductions − >80% variable costs the executive management o Variable compensation team and Board of Directors' reductions o Flexible manufacturing process compensation o Consolidation of facilities − Ability to shift production Wage reductions for salaried across like-product facilities team members across the o Sale-leasebacks (2.7MM sq. ft.) o Ability to moth-ball or ramp up organization o Staggered lease terms for facilities based on capacities and Furlough of certain team leased facilities (6.9MM sq. ft.) demand members that were impacted o Divestiture of facilities and/or o Geographically diverse by the suspension of brands operations − Presence in 23 states o Aggressive inventory and Freeze on all non-essential o Non-capital-intensive businesses working capital reductions hiring o o Flexible working capital Suspension of dividends Prioritized critical maintenance capital expenditures Aggressive reduction in inventories and working capital Investor Presentation 15
MARKET OUTLOOK – 2020 Q1 Q2 Q3 Q4 Initial Impact Significant Impact Stabilization/Recovery Recovery • Dealer inventory levels • April OEM shutdowns • OEM production normalizes calibrated dramatically impacted • Pent-up demand and long-term benefits from lifestyle and RV • OEM production curtailed production, followed by adaptation changes related to COVID-19 and social at the end of March, but ramp-up in May distancing still shipped produced • Pent-up demand driving • Dealer inventories still running lean 54% of Sales* units to dealers strong retail traffic • Dealer inventory • Quicker resumption of • OEM production normalizes correction predictably OEM production as • Pent-up demand and long-term benefits from lifestyle and Marine continued industry headed into adaption changes related to COVID-19 and social • COVID-19 disruption in prime selling season distancing late March dramatically • Dealer inventories • Expect dealer inventory levels to be recalibrated by the 14% of Sales* impacted March retail continue recalibrating start of the new model year • Q4 momentum continued • Experienced a reduced, • Production normalizes into Q1 yet steady, pace of • Long-term benefits from favorable demographics, low MH • Production curtailment in production in April for inventories, rising home prices, and low interest rates late March due to those identified as COVID-19 essential businesses 19% of Sales* • Robust growth in new • Experienced a reduced, • Long-term benefits from favorable demographics, low housing starts continued yet steady, pace of inventories, rising home prices, and low interest rates Industrial into Q1 production in April for • Increased demand from big box retail as homeowners • Experienced modest those identified as look to remodel impact in late March essential businesses 13% of Sales* related to COVID-19 * Q1 ’20 LTM Investor Presentation 16
FAVORABLE LONG-TERM DEMOGRAPHIC TRENDS Investor Presentation
STRONG, FAVORABLE DEMOGRAPHIC TRENDS ACROSS END MARKETS Lifestyle and Leisure Housing and Industrial o Participation in outdoor activities of U.S. population o U.S. adult population estimated to expand by 12MM has averaged 49% over the last five years between 2019 – 2024 o Improved consumer savings levels for discretionary o Gen Y (Millennials - age 18-39) is the largest group: spend items 98MM in 2019 (older Gen Y in peak home buying years) o Culture shift toward outdoor activities being embraced by all population segments and ethnicities o Growth in population of first-time home buyers and those looking to downsize o Shift in consumer behavior that aligns with social distancing guidelines, which are naturally embodied by o Record low housing inventory is driving up prices – the RV & boating lifestyles lack of high-quality, affordable homes o Continued low interest rate environment Sources: 2019 Outdoor Participation Report; RVIA; U.S. Census Bureau Investor Presentation 18
9 1 Specific Specific population is within familybuilding stages of lifecycle INCREASING InvestorPresentation Company, Euromonitor, Sources: RVIA & TheNews 36,000 38,000 40,000 42,000 44,000 46,000 48,000 50,000 1990 Key Population Demographic Supports Future Market Upside PotentialUpside Market FutureSupports Demographic KeyPopulation 1991 1992 1993 portion of disposable income to discretionary purchases and high 1994 POPULATION 1995 1996 1997 1998 Articles 1999 2000 2001 USPopulation: Ages35 2002 WITHIN WEALTHFORMING DEMOGRAPHIC 2003 2004 2005 2006 2007 2008 19 2009 2010 2011 – settling settling into permanent 2012 – 2013 44 2014 (000s) 2015 2016 2017 2018 2019 - 2020 ticket items 2021 2022 housing 2023 2024 2025 and allocating a 2026 2027 2028 2029 2030
END MARKET TRENDS Investor Presentation
DIVERSE END MARKET WITH FAVORABLE SECULAR TRENDS RV End Market Overview o Despite further drawback, 2019 marked the fourth most historical units ever shipped o Shipments of wholesale units expected to decline ~21% in 2020 reflecting market disruption related to COVID-19 in 1H20 U.S. Wholesale Unit Shipments (000s) RV End Market Performance $3,170 $3,112 Historical Average: 340 units $2,965 $2,234 $1,789 $2,039 $1,434 $1,128 $1,287 $1,265 505 $670 $880 484 431 406 2015 2016 2017 2018 2019 LTM 374 3/29/20 353 357 321 323 End Market Revenue ($MM) Content Per Unit 286 252 237 242 Market Growth 166 17% 13% 12% 11% 15% 4% 5% (4%) (16%) (21%) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E Shipment Units Average Industry Growth *2020E = Company Estimates Investor Presentation 21
DIVERSE END MARKET WITH FAVORABLE SECULAR TRENDS Marine End Market Overview o 1M boats are expected to be retired in the next 3 – 4 years due to increasing average age of boats in service (estimate 25 years) o $10.5B in retail sales of new powerboats in 2018 U.S. Retail Unit Shipments (000s) Marine End Market Performance $600 $1,578 $1,531 $2,000 $1,256 Historical Average: 185 units $500 $1,500 $400 $538 $328 $316 $1,000 267 $274 $300 $111 $179 $500 $200 $112 $0 $100 $21 $36 ($500) 218 210 $0 ($1,000) 203 208 199 2015 2016 2017 2018 2019 LTM 182 172 3/29/20 158 157 154 153 End Market Revenue ($MM) Content Per Unit 139 143 Market Growth (Retail) 9% 10% 7% 6% 3% 3% 5% 4% (4%) (24%) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E Shipment Units Average Industry Growth *2020E = Company Estimates Investor Presentation 22
DIVERSE END MARKET WITH FAVORABLE SECULAR TRENDS Manufactured Housing End Market Overview o Demand for new construction o Pent up housing demand; improving credit combined with low inventory and affordability to drive continued growth o Shipments of wholesale units expected to decline ~17% in 2020 MH End Market Performance $4,616 $4,543 MH Wholesale Unit Shipments (000s) $600 $5,000 $4,500 $500 $2,849 $437 $443 $4,000 $2,289 $3,500 $400 $1,966 $275 Historical Average: 73 units $1,825 $3,000 $300 $159 $208 $2,500 $128 $2,000 $200 $1,500 $1,000 $100 $500 96 93 97 95 $0 $0 82 81 79 2015 2016 2017 2018 2019 LTM 71 60 64 3/29/20 50 50 52 55 End Market Revenue ($MM) Content Per Unit Market Growth 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 15% 14% 10% 10% 6% 7% 3% 4% (2%) (17%) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E Industry Growth *2020E = Company Estimates Investor Presentation 23
DIVERSE END MARKET WITH FAVORABLE SECULAR TRENDS Industrial End Market Overview o Expanded portfolio of products, driven primarily through acquisitions, allows Patrick to capture more of forecasted growth o Due to our array of capabilities and diversified geographic presence, we can shift capacity to fill market needs o Consensus estimates for 2020 of 1.016M Seasonally Adjusted New Housing Starts (000s) Industrial End Market Performance $294 Historical Average: 981 units $280 $285 $188 $147 1,355 1,290 $101 1,203 1,250 1,112 1,174 1,003 1,016 906 925 781 2015 2016 2017 2018 2019 LTM 554 587 609 3/29/20 End Market Revenue ($MM) Market Growth 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 28% 18% 11% 8% 6% 4% 2% 4% 3% (21%) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E Industry Growth *2020E = Company Estimates Investor Presentation 24
FINANCIAL OVERVIEW Growth Initiatives and Capital Allocation Strategy Investor Presentation
STRONG TRAJECTORY OF SALES AND EARNINGS GROWTH Sales Growth ($MM) Earnings Growth $200 $6.00 $2,263 $2,337 $2,318 +42% $180 $4.93 +3% $5.00 +38% $160 (22%) +43% $1,636 $140 $3.85 $3.86 $3.48 $120 $4.00 $120 +34% $1,222 +34% +40% $100 $90 $90 $3.00 $2.43 $86 +33% +42% (25%) $920 $80 $1.81 +54% $56 $2.00 +25% $60 $42 +32% $40 +38% $1.00 $20 $- $- 2015 2016 2017 2018 2019 LTM 2015 2016 2017 2018 2019 LTM 3/29/20 3/29/20 Net Income ($MM) Diluted EPS o Sales continued to grow and outpace their respective markets, albeit at a slower pace in 2019, driven by acquisitions, new products and line extensions, and market share gains, and were offset in part by lower sales volumes in our end markets o Net income and EPS in 2019 reflected the impact of headwinds associated with each of our primary markets and were offset by cost reduction and strategic initiatives Investor Presentation 26
Q1 2020 FINANCIAL HIGHLIGHTS COVID-19 IMPACT o Net sales of $589.2MM decreased 3.1% o Sales decline primarily attributable to lost production days and o Operating income of $39.3MM increased 9.6% business disruption in our end markets in late Q1 2020 Income o Operating margin expanded 80bps to 6.7% Statement o Earnings negatively impacted by o Net income of $21.2MM increased 1.6% lost production days o Diluted EPS of $0.91 increased 1.5% o Completed two strategic acquisitions adding $20MM in o Suspended acquisition activities expected annualized revenues o Returned $21.4MM to shareholders through share o Share buybacks paused Other repurchases and dividends Important o Aggressive management of cash Highlights o Available liquidity of over $500MM, including $94.5MM flows and working capital to of cash, with no major debt maturities until 2023 preserve liquidity Investor Presentation 27
TRACK RECORD OF STRONG CASH FLOW GENERATION Cash Flow from Free Cash Flow1 ($MM) Free Cash Flow per Share2 Operating Activities ($MM) $250 $8.00 $180 $166 $165 $7.08 350% $160 $152 $7.00 $6.81 $200 $6.54 $200 $192 300% $140 $178 $6.00 $120 250% $5.00 $150 $100 200% $82 $4.00 $3.57 $77 $97 $100 $80 $3.14 $100 150% $59 $3.00 $2.53 $67 $60 89% 86% 100% 77% 84% $2.00 $40 $50 64% 50% $1.00 $20 $- 0% $- $- CF from Op. Activities % Conversion % Conversion is operating cash flow as a % of EBITDA 1 FCF is calculated as operating cash flow less capex 2 FCF divided by weighted average diluted shares outstanding Strong FCF Generation Provides Flexibility Across Strategic and Financial Objectives Investor Presentation 28
STRONG BALANCE SHEET AND LIQUIDITY Strength of our cash flows, combined with our liquidity, provides us with the flexibility to navigate a variety of scenarios through these unprecedented times o $550MM Senior Secured Revolver NET LEVERAGE1 ($MM) Debt o $100MM Term Loan ($97.5M o/s at 3/29/20) Structure o $172.5MM 1% Convertible Senior Notes Total Debt Outstanding $703.8 o $300MM 7.5% Senior Notes Less: Cash on Hand (108.8) Net Debt $595.0 o Revolver borrowings – September 2024 o Term Loan – pre-determined quarterly installments; LTM Adj. EBITDA 256.2 Debt balance due at maturity Maturities o Convertible Senior Notes – February 2023 Net Debt to Adj. EBITDA 2.32x o Senior Notes – October 2027 LIQUIDITY ($MM) o Consolidated Net Leverage Ratio – maximum 4.00x vs. Total Revolver Credit Capacity $550.0 2.32x at 3/29/20 Covenants o Consolidated Fixed Charge Coverage ratio - minimum Less: Total Debt Outstanding (139.8) 1.50x vs. 6.53x at 3/29/20 (including outstanding Letters of Credit) Unused Credit Capacity 410.2 o Available liquidity, including cash on hand - $504.7M at Add: Cash on hand 94.5 Liquidity 3/29/20 Total Available Liquidity $504.7 1 As defined by credit agreement. Investor Presentation 29
DISCIPLINED CAPITAL ALLOCATION STRATEGY Our capital allocation strategy is centered around the utilization of strong cash flows, a balanced disciplined leverage position, and capital resources to grow and reinvest in the business model Historical Capital Allocation ($MM) Future Priorities Opportunistic Acquisitions $93 $171 $160 $274 $485 $93 $53 o Strategic criteria 3% 8% 4% 15% 13% 10% 6% 22% ‒ Strong management team 5% 29% ‒ Aligns with our primary end markets 7% 7% 30% ‒ Expanded/enhanced customer relationships ‒ Expand geographic reach 11% ‒ Expands product offerings and manufacturing/distribution capabilities 14% 92% o Financial filters 87% 78% 82% ‒ Focused on accretive margins 71% ‒ ROIC > Cost of Capital within 1-2 years 60% ‒ EPS accretive in first full year 46% Capex o Continued critical investments to drive efficiencies and capacities where necessary 2014 2015 2016 2017 2018 2019 Q1'20 Dividends Acquisitions Capex Dividends Stock Buybacks o Latest dividend declared for Q2’20 on 5/14/20 Stock Buybacks o Paused out of abundance of caution due to COVID-19 Investor Presentation 30
KEY INVESTMENT HIGHLIGHTS Driving operational efficiencies with manufacturing flexibility across 01 all four end markets Strong leadership team with proven ability to manage through challenging 02 economic conditions 03 Uniquely positioned to benefit from continued shift toward outdoor activities Prudent cost management while remaining well-positioned for strategic 04 growth opportunities in a fragmented market 05 Strong balance sheet with ample liquidity and an enhanced capital structure Investor Presentation 31
APPENDIX Investor Presentation
END MARKET PRODUCT CATEGORIES RV PRODUCT CATEGORIES1 TOWABLE MOTORIZED Shipments: 88% Wholesale | 60% Retail Value Shipments: 12% Wholesale | 40% Retail Value Travel Trailer | ASP: $22,900 Fifth Wheel | ASP: $49,000 Class A | ASP: $212,800 Class B & C | ASP: $95,600 Total Retail Value of Shipments in 2018: $20B MARINE PRODUCT CATEGORIES2 Pontoon Ski & Wake Fiberglass Aluminum ASP: $39,200 | 28% of Market ASP: $104,300 | 5% of Market ASP: $75,500 | 36% of Market ASP: $22,700 | 31% of Market U.S. Expenditures On Boats, Engines and Accessories Totaled $42B in 2018 MANUFACTURED HOUSING PRODUCT CATEGORIES3 Single-Section Homes Multi-Section Homes ASP: $48,300 | 50% of Market ASP: $92,800 | 50% of Market 1 Source: RVIA 2018 Industry Profile (travel trailer ASP stat includes camping trailers and truck campers). 2 Source: NMMA 2018 Statistical Abstracts. 3 Source: MHI / IBTS. Investor Presentation 33
PATRICK PRODUCT LINES: RV EXTERIOR Front & Dash Panels Bow Trusses Exterior Speakers Rear Caps Additional Product Lines: o Softwoods o Full Body Paint o Aluminum Gauges o Steel Gauges o Mill Finish & Pre-painted Aluminum and Steel o Slit & Embossed Steel o FRP Coil & Sheet o Trim Panels o Fuel Systems RV Power RV Grills & Cords & Inlets Accessories Aluminum & FRP Side Walls Motion Sensing Fender Skirts Lights Laminated Side Walls LED Lighting Paint & Paint Mask Investor Presentation 34
PATRICK PRODUCT LINES: RV INTERIOR Closet & Passage Fiberglass Bath Fixtures Doors & Shower Doors Closet Hardware Lighting Microwaves Backsplashes Mattresses Laminated Panels Electronics Laminate & Vanity/Wall & Printed Vinyl Ceramic Flooring Mirrors Additional Supplied Products: Furniture o Exit Lighting Countertops o Ceiling Fans Cooktops o Power Cords & Inlets o RV Tank Heater Pads o Fire Extinguishers o Electric Fireplaces o Wiring, Electrical & Plumbing Products o Inverters o Tire Pressure Monitors o Electrical Switches, Receptacles, & Outlets Drawer Fronts & Sides o RV Transfer Switches Cabinet Hardware o Battery Selector Switches o Cut-to-Size, Boring, Foiling & Edge- Under Cabinet Lighting Banding o Flooring Adhesive Tile o Instrument Panel Dinettes, Tables & Chairs o Made-to-Order Laminated Products including Vinyl, Paper, Veneers & High- Window Trim Pressure Laminates (HPL) o Trim Products Slide Trim – Foam, Hardwood, Wrapped Hardwood Speakers Accessories Investor Presentation 35
PATRICK PRODUCT LINES: MARINE Wire Harnesses Electronics Wire Screens Aluminum Fuel & Marine Growth: Holding Tanks o Wind Shields (Glass) o Plastic Fuel & Holding Tanks o Fuel System Related Components Ladder Helms o Plastic Seat Bases & Components Dash Assemblies o Vinyls (Biminis, Covers) o Fabricated & Extruded Aluminum Boat Covers, Tops, o Electronics Decking, Flooring, Carpet, Vinyls Towers & Frames o Gauges, Instrument Panels, Displays o Lighting o Steering & Throttle Controls Dash Assemblies o Plastic Products: Boxes, Inlay Tables Wire Harnesses o Canvas Products, Panels & Trim Boat Hull Design & Tooling Aluminum Fuel & Holding Tanks Investor Presentation 36
PATRICK PRODUCT LINES: MANUFACTURED HOUSING Kitchen & Bath Fiberglass Bath Fixtures & Shower Faucets & Sinks Doors & Enclosures Gypsum (Drywall & Drywall Wrapped Profile Moldings Plumbing Products Finishing Products) Siding Trusses Ceiling Fans Interior & Exterior Decorative Lighting Fixtures Interior Passage Shingles Doors Backsplashes Additional Supplied Products: o Building Arches o Closet Organization Products o Adhesives & Sealants o Innovative Lighting o Electrical Components (e.g., Panels/ Breakers, Outlet Boxes & Switches/ Receptacles) o Fireplaces and Surrounds o Made-to-Order Laminated Products Medicine including Vinyl, Paper, Veneers & High- Cabinets Pressure Laminates (HPL) o Cut-to-Size, Boring, Foiling & Edge- Banding o Solid Surface, Granite and Quartz Fab o Flooring Adhesive o Tables & Signs o Roof Trusses o Wardrobe Doors & Hardware Systems Electronics o Closet Organizers & Shelving Printed o Air Handling Products Vinyl o Carpeting Tile Recessed Lighting Countertops Fluorescent Lighting Laminate & Ceramic Flooring o Ventilation System & Ridge Cap Wiring/Electrical Under Cabinet o Felt Paper Lighting Products Cabinet Doors & o Ice & Water Protection Components o Microwaves Drip Edge o Flashing o Roofing Membrane Investor Presentation 37 o Soffit & Fascia
38 NON-GAAP RECONCILIATIONS Reconciliation of Cash Flow from Operations to Free Cash Flow ($ in millons) 2007 2015 2016 2017 2018 2019 LTM 3/29/20 Cash Flow from Operations $ 23 $ 67 $ 97 $ 100 $ 200 $ 192 $ 178 Less: Capital Expenditures (3) (8) (15) (22) (34) (28) (26) Free Cash Flow $ 20 $ 59 $ 82 $ 77 $ 166 $ 165 $ 152 Reconciliation of Net Income to EBITDA ($ in millions) 2015 2016 2017 2018 2019 Net income $ 42 $ 56 $ 86 $ 120 $ 90 Add: Depreciation & amortization 17 24 33 55 63 Interest expense, net 4 7 9 26 37 Income taxes 24 28 27 32 28 EBITDA $ 87 $ 115 $ 155 $ 233 $ 217 Reconciliation of % Conversion (Cash Flow as % of EBITDA) ($ in millions) 2015 2016 2017 2018 2019 Cash Flow from Operations $ 67 $ 97 $ 100 $ 200 $ 192 EBITDA $ 87 $ 115 $ 155 $ 233 $ 217 % Conversion 77% 84% 64% 86% 89% Reconciliation of Free Cash Flow Per Share ($ / # shares in millions except per share data) 2015 2016 2017 2018 2019 LTM 3/29/20 Free Cash Flow $ 59 $ 82 $ 77 $ 166 $ 165 $ 152 Divided by: Weighted Average Diluted Shares Outstanding 23.3 22.9 24.6 24.3 23.3 23.3 Free Cash Flow Per Share $ 2.53 $ 3.57 $ 3.14 $ 6.81 $ 7.08 $ 6.54 Use of Non-GAAP Financial Information Free Cash Flow, Earnings before interest, taxes, depreciation and amortization (“EBITDA”), % Conversion, and Free Cash Flow Per Share are non-GAAP financial measures. In addition to reporting financial results in accordance with accounting principles generally accepted in the United States, we provide non-GAAP operating results adjusted for certain items and other one-time items. We adjust for the items listed above in all periods presented, unless the impact is clearly immaterial to our financial statements. We utilize the adjusted results to review our ongoing operations without the effect of these adjustments and for comparison to budgeted operating results. We believe the adjusted results are useful to investors because they help them compare our results to previous periods and provide important insights into underlying trends in the business and how management oversees our business operations on a day-to-day basis. Investor Presentation 38
NON-GAAP RECONCILIATIONS (CONTINUED) Reconciliation of Net Income to EBITDA to Adjusted EBITDA ($ in millons) 2007 2019 LTM 3/29/20 Net income (loss) $ (5.8) $ 89.6 $ 89.9 + Depreciation & amortization 6.4 62.8 64.4 + Interest expense, net 6.5 36.6 38.1 + Income taxes (credit) (2.8) 28.3 29.9 EBITDA 4.2 217.3 222.3 + Stock compensation expense 1.5 15.4 15.8 + Acquisition proforma, transaction-related expenses & other (0.2) 17.3 18.1 Adjusted EBITDA $ 5.5 $ 250.0 $ 256.2 Reconciliation of Net Leverage* ($ millions) Total debt outstanding @ 3/29/20 $ 705.0 Less: term loan payment (1.2) Total debt outstanding @ 3/31/20 703.8 Less: cash on hand @ 3/31/20 (108.8) Net debt @ 3/31/20 $ 595.0 LTM Adjusted EBITDA $ 256.2 Net Debt to Adjusted EBITDA 2.32 X *As defined by credit agreement which includes debt balance and cash balance two days following quarter end Use of Non-GAAP Financial Information Earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA are non-GAAP financial measures. In addition to reporting financial results in accordance with accounting principles generally accepted in the United States, we provide non-GAAP operating results adjusted for certain items and other one-time items. We adjust for the items listed above in all periods presented, unless the impact is clearly immaterial to our financial statements. We utilize the adjusted results to review our ongoing operations without the effect of these adjustments and for comparison to budgeted operating results. We believe the adjusted results are useful to investors because they help them compare our results to previous periods and provide important insights into underlying trends in the business and how management oversees our business operations on a day-to-day basis. Investor Presentation 39