PATK - Earnings call transcript Q1 2024 | Patrick Industries, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to Patrick Industries First Quarter 2024 Earnings Conference Call. My name is Darryl, and I'll be your operator for today's call. [Operator Instructions]. Please note that this conference is being recorded. And I will now turn the call over to Mr. of President Vice O'Hara, Investor Relations. Steve Mr. may you begin. O'Hara,

Steve O’Hara

Roeder, our Good today I'm morning. and and Housing and by Sports Feiler, President, to also morning, welcome call here Andrew RV; joined President Finance, Nemeth, and Jeff this Kip Technology CEO; Ellis, Power everyone, Andy Rodino, CFO; SVP, on is Matt the call Q&A. for

a be securities in Patrick of beyond Industries and operations the from are statements. may in materially regarding laws. many today's the and those actual differ under call considered the of forward-looking conference made statements which statements the Certain which forward-looking factors, company's results number There could described to its are events control, cause

for filings XXXX in to like circumstances occur no to These the date our Andy identified or the factors with obligation now are statements that turn in made. I Commission. year XX-K to our and the We over other press reflect call would events to and Form the are Securities Exchange our these undertake Nemeth. forward-looking statements the update ended after releases,

Andy L. Nemeth

Thank and Good morning, for you us the Steve. call thank on today. you, joining everyone,

a our the diligently a team As performance while results quarter finished balance first out the remains strength day in generated, and day fiscal put and that have managing result strong has and of of sheet. the Patrick year in of we the our we position as XXXX business work in and

the their efforts members, I for and possible Our tremendous success team would focus. thank not dedication of incredible without our be and them

strive in markets. outdoor guiding independent solutions trusted, enthusiast and supplier of brands choice component of the is Our the our we model as be better to housing family building

building has Our high-quality our the innovative customer evolved product and service team's relentless accretive through solutions. pursuit of great growth years strategy over

is Powersports and a unmatched. supplier and to our RV, our now OEMs scale needs to We customers' marine, adapt manufactured and have become ability to alive believe housing key we

resilient, these As we diversified the market in especially conditions. market appeal have our is ecosystem. a executed on of uncertain further refined more proving end Which

further quarter Our strategic another first foundation solidifies growth. platform powersports industry the serves acquisition of in as for future Sportech and and organic the

in segment to in which OEM We are this innovative Sportech creating team particularly engineered focuses. by on promising utility acquisition close brings a our side-by-side the The valued potential highly space, outdoor aligned passionate purpose partnership with our the dedicated enthusiast Sportech excited products in in as customers. with

ahead future with that have Sportech we potential are see the set growth initiatives and Patrick of teams and motion already We us. the thrilled in

post to drive of to team Patrick and deliver bringing benefits able Examples to of the Rockford immediately to the being synergies customers. their to value additional our at respective their our how connected businesses expertise, are And closing Fosgate collaboratively leverage ecosystem. involves processes our showcase

key metals, logistics, business for collaborating potential brainstorming [ our walk-through invited including a between and their session, and businesses opportunity material plastics, to and harness a synergies. areas line and avenues also of DASH ] identify practices, sourcing for We to best units, Sportech production

and success and business's family strategy this We Patrick they our we key business of and through each remains to strive our is tenet collaboration While our heights. future to to alive. collective our believe achieve passion keeping crucial forward, maintain individuality spirit entrepreneurial a success the businesses model, the drive as empowers new

leadership and organic prospects seek strong, culturally aligned growth accretive out solid businesses to teams, margins. continue entrepreneurial We with

management, sheet have the execute our we Our operational working our exemplifies accountability. all capital which ability for and to brands level at at balance

cash ensure we flows on position. also done disciplined to has delivering team a inventories a great of maintaining partners focused working strong job our while manage leverage with Our our customer remain and

acquisition, Sportech acquisition just from well are company's and history. position following leverage balanced X maintained, has improved our the already in largest inventories the months the and Our ago

Now moving to our on financial results.

first revenue approximately XX-month consolidated basis, quarter And our million. a $XXX trailing billion. X% increased $X.X to were on revenues Our

$X.XX. in per improved income was income net the Our first quarter million, and XX% $XX share diluted to net

transaction quarter per Excluding adjusted our $X.XX. costs adjustments, was $XX diluted adjusted XX% million purchase grew and income first share and net accounting earnings to acquisition

our as diversification during Our to also to of the slow model market anticipate team shown our margin and highly gained past the performance. our and items, through performed period and variable year, macroeconomic continues efficiencies as adjust throughput better forces a and management of our operational acquisitions automation by continued among completed structure over cost solid result through other seasonally well a and

have and in space Excluding improved enthusiast in has to the We're X.X% margin operating our acquisition in us to Andy points who experience increased and XX.X% while quarter. to like On March. his the Andy expertise objectives, businesses our team and EBITDA our foundation adjusted tremendous points and family. level, adjustments on administrative brings Andy and our outdoor basis supporting purchase transaction pleased into growth both balance margin periods, I'd an welcome ensuring financial accounting sheet Roeder, to CFO, joined skills strong. the new costs Patrick XX basis in remains XXX impressive

to on plans. Finance, we continued Senior resumed contributions. to confidence his has I'd and also role who CFO Matt thank operational forward of role filled successfully like his with Vice in strategic our execution interim helped as deliver look and Feiler, us Matt the President and

who on I'll highlight now call the and markets. turn over the our provide end detail quarter more to will Jeff,

Jeffrey Rodino

everyone. Good Andy. Thanks, morning,

the the primary dynamic XXXX. to our have bottom what experience MH end and cycle continue of trends We improved markets. in believe reaching all RV modestly after of across conditions we was

shipments impact high. and continue ownership costs online consumers our across negatively and demand market, dealers While to remain rates markets end the our relatively as interest improved of have in

sequential market some and typically seen reminder, As quarter, and cycles shipments first historically RV in enter the the has a improvement. recovery RV space, -- year-over-year outdoor marine Powersport. and in In exit wholesale and the economic market enthusiast precedes been to RV the have first

change. season have coming model preparation spring We year selling for in XXXX and the

depend positive However, retail will the on trends durability sell-through. of

RV about of content RV Our increased $X,XXX to first per period and by a compared unit achieved when basis XX% XXXX. record on to sequentially unit was X% a note, the revenue. TTM from On content level $XXX same million the quarter consolidated on off positive a revenues XXXX. we first represented TTM QX per of of for in basis RV in XXXX increased quarter XX% of from the QX XXXX

the wholesale registrations XX,XXX quarter. the of an unit units increased the quarter to quarter estimated were approximately units XX% first According We shipments XX,XXX currently to XXXX. from estimate to in retail first RVIA, approximately RV down X%

season. at of XXXX X dealers have approximately of inventory QX weeks XX is averages below increased the hand as upcoming to weeks. approximately historical weeks the end X weeks Our estimates by further for the of indicate well that to TTM dealer XX to This selling to plan on XX XX

disciplined will recovery. On OEMs of production, have remained response very lessen the and in which their sell-through our business, time the the help inventory in eventual between side marine replenishment

QX expect marine bottom and then as see in in product. out We the stabilize dealers model QX begin and our year into to new await to business especially consumers and QX,

long-term the friends. marine appeal of time enthusiasts of the the to water in and on the outdoor believe voting spending industry see as family We durability with continue and

estimate when XX,XXX line unit $XXX and XX% towards wholesale is with of wake declined pontoon. units unit the respectively. pontoon and QX ski wake estimated XX% shipments powerboat and from XX% down We XX%, XXXX shipments to ski approximately representing and approximately revenues with Marine quarter, XX% expectations especially our sales. were change considering in in consolidated of million our This to up Our mix quarter in first sales

We currently estimate were first approximately an quarter retail units. to XX% XX,XXX powerboat shipments down estimated

both revenue important on we the recalculated wholesale compared in marine-related to a adjustments. content to these unit roughly basis is $X.XX in marine On to It marine per quarter XXXX. marine revenue our per the for the period been powersports content and Our to compared note unit figures prior revenue content unit estimated have sequential was a both and fourth last quarter flat that content for and marine reflect first TTM in our same year. reported [indiscernible] was periods, basis, of X,XXX

to on TTM average, of the estimates XX to estimate weeks weeks. XX we Our hand hand. This on approximately XXXX end at historical XX is weeks weeks of which below estimated to have inventory the X dealer at an well that increased X the to indicate QX XX

businesses, steady and housing remained platform site residential for well and performed affordable MH both demonstrated Our built the in and our diversified the interest strong. housing headwinds of consumers despite resilience demand remains as rates

the housing softness housing which starts continues revenue was have In Multifamily single-family consolidated XX% XX% million, to and manufacturing our $X,XXX. basis quarter, of We QX, X% representing increased QX in housing content up our the of revenue improved a represents X% $XXX increased experience XX% to residential approximately sales improved. while housing shipments quarter, in wholesale per starts we by housing MH unit X%. estimate to for TTM unit total the on

our the third-party will data this primarily markets, for our will As we our be and is other the cart focus. powersports commentary begin business, reporting focus source is And on and end unlike side-by-side Powersports sectors broad on reflect motorcycle industry. of space. a there golf no on wholesale industry-wide shipments.

following primarily through had has acquisition, includes and golf we a to the motorcycles, Although our audio which Sportech Rockford premium shifted in side-by-side have carts space, presence focus side-by-side offerings. Fosgate's

provide whole. industry insight intention our our course, recreation this business metrics particularly along accurately we the segment. we more track a expand is the Ultimately, into business as then in space, powersports commentary our will powersports levels in relevant dealer the an the Anecdotally, serve on is to providing as with we our presence appear markets reflect elevated, broader the evolve industry. within Of outlook inventory to

the resilient. of more demand appears industry, However, utility be on side to the

creature This, [ year supports doors The and we ] this coupled optimism for comforts enclosures our tech the beyond. into with like backlog and manufacturers. move HVAC demand promising as for Sportech's requires

down potential audio the product in OEMs to to both the the and high-value other we aftermarket. road, produce With add solutions the and

which quarter the $XX Our consolidated months XXXX of of represents first including million Powersport expectations. were X revenue, quarter, X% approximately sales, our Sportech which in outperformed revenues

and in softer we inward running the dedicated marine in RV, on design powersports focused as evolution evaluating strategic OEMs group, periods during with out. with OEM off on which generally we the focus initiative customers, years innovation fourth of this We collaborating believe well front, remains demand. retail are On advanced X solutions intensely product model the is X market. best-in-class quarter highlighted and our product timed and and and

of in leading open examples for Outrigger increased fiber functionality won collapsible water. [indiscernible] the natural innovation of a sleek movement and design and Their water bait carbon poles. more innovations internal our an award their in Two as results

carbon boating our of potential we outdoor which continue to of We both experience believe through market. enhanced with have enthusiast RV can the the along be products fiber and use launched

additional new the coming providing pads opportunity additional flooring appeal. SeaDek also customization known won EVA visual and can comfort financial pads which now comments SeaDek to the will over step lighted and an traction takes in call Andy a is award for RG marine for sliding Roeder, level patented provide products The superior SeaDek, performance. into our to whole their padding. who Lighting decking, on embed and I'll of of turn foam for their

Andrew Roeder

good Thanks, morning, Jeff, everybody. and

like I'm stellar organic warm welcome. with and the I'd team profitable become I'm and Andy, solid Jeff, toward supporting First, and maintaining the the for of strategic foundation rest team financial Matt of drive work Patrick's our the and a to an family exciting part to thrilled at here time, such continued to Patrick here thank ready growth. such

results. financial our to on Now

estimated to first housing offset than in unit increase quarter reduction with Gross shipments, consolidated coupled million, higher our growth to decrease and estimated XX% wholesale which in diversification and powerboat margin net acquisition in together our manufactured an the driven more and X% in and XX% of cost shipments our products impact result Tech points Our the which Sport wholesale and increased by larger shipments. acquisitions, engineered XX sales automation RV mix initiatives. investments marine an XX.X% $XXX of of continuous improvement wholesale basis was strategic increased of X% initiatives,

acquisition. sales. $X acquisition. $XX Sportech the basis XX decreased to related Sportech purchase from transaction increase million cash quarter accounting expenses basis in first includes increased year-over-year or expense points reflects as to a step-up in charges quarter of X% and points XX million inventory of related to gross the SG&A the margin first the percent XXXX, The costs The but of

Excluding costs the a SG&A sales associated the XX of acquisition, as expenses nonrecurring XXXX. the of points decreased percent with Sportech basis transaction versus acquisition quarter

basis million, in due improved points million SG&A. to $XXX to acquisition-related while $XXX were to primarily $XX compared million and margin XX operating the expenses income [ Operating the year, higher ] Ampion Operating impact to quarter costs X.X%. expenses last [indiscernible] of on

Excluding to quarter. XX operating in acquisition the adjusted adjustments transaction costs and related X% to points purchase improved first acquisitions, accounting basis margin

The improvement Tech from diversification. and with houses, discussed. factors, marine the our the These previously of impact higher higher the of of amortization revenue other partially operating benefits and positive reflect driven by RV by margin again offset factors lower in Sport coupled among was acquisition while strategic revenue our expense

income increased XX% periods, costs to Adjusting and Net in per $X.XX million adjusted million, equates net $XX to acquisition which share. income adjustments for transaction $X.XX share. per the both XX% $XX to improved purchase accounting or diluted

Our the reported in notes. from and additional first dilution adjusted related our $X.XX XXXX share XXXX [ include EPS ] for of quarter accounting per approximately veritable

required offset and/or which is cash company's reduce principal amount notes. in of upon make common have We excess any are of the the eliminate to any the payment place the stock conversion expected to company hedges of notes dilution of or in potential any convertible converted any

always these million purposes, year. be XX% margin XX.X% $XX grew when earnings are the of expanded anti-dilutive reporting basis quarter last share. included per million or first Adjusted versus for points cannot XXXX. to hedges to For Adjusted XXX EBITDA reporting $XXX EBITDA

first XX.X% price. year. of related The increase rate to the benefit XX.X% the for awards decrease in the the quarter quarter to tax effective tax overall rate compared was first to Our share-based the tax stock due vesting the prior was and in Patrick's the in in

for rate X our for approximately year, next expect to to XX% implying the XX% We full tax effective be to quarters. XX% the

months was due XXXX in $XX million capital and stronger primarily X year approximately by operations the the an to $X Looking period, first at working for outflow provided of compared million of approximately Cash flows. cash prior net management income. to

property, equipment CapEx, improvements. of and million, plant reflecting This $XX maintenance and projects select purchases were quarter, automation facility

We efficiencies to for initiatives million. our innovation, expenditures allocating XXXX remain We and estimate reinforce our as to automation long-term $XX customers will to total value our we stakeholders. committed million capital capital and $XX

to allocation capital Our continue goal evaluate acquisition with sheet to plan a a is to these liquidity. maintaining possible assess while continue initiatives a balance robust we disciplined growth organic strategy, ample initiatives maintaining We and while growth strong pipeline.

the of on the and the Sport was Our of down a from X.Xx at X.Xx January. pro net leverage closing at Tech quarter end basis in forma

During generated cash liquidity the the of million. $XX same At on our year. to XX-month the was and $XXX million compared quarter, cash for first of $XXX last of revolving of free period, quarter, we free generated flow credit $XX for end we million of of flow the total million, trailing million $XXX net the million our comprised $XXX hand cash on unused capacity period facility

major strength, We we XXXX, remain the on strategic as the form quarter. potential the to arise. and no until they growth sheet of the opportunities balance continue debt million assess to seize liquidity to and maturities flexibility returned in during With $XX dividends have profitable offense

of the opportunistic the end current share our remain at will quarter. authorized We first million have and left under on plan repurchases $XX

market Moving on to outlook. our end

consumer during expect and to continue environment hold interest the willingness year. current impact dealers' We to rate negatively inventory demand the to

estimate XXXX cautious wholesale total shipments and unit In on as dealers trends, product approximately XX% units our we XXX,XXX industry down estimate marine we rate XX%. down We about in be to market, down X% approximately wholesale retail of inventory implying will to expect RV mix and carrying units midpoint. for at recent XX% approximate our shipments XX% year to will cost full will XXX,XXX to X% the Based to be overall retail units this the year environment. XXX,XXX currently full be RV remain

we year including estimate In will in categories Sportech, full was $XXX product our million, unit forma powersports in our revenue our shipments pro basis, be on XXXX XXXX. end market powersports flat and a

gain For purposes, digits. organic we modeling in expect to content the mid-single

will side business, basis. sales we XX% available with housing shipments retail MH of a for the our up production to XXXX real-time estimate On unit wholesale absorbing and wholesale X% be on

XXXX market, versus new housing up end flat XXXX. starts residential be estimate and will X% In our we to housing

improve estimate versus remarks. completes outlined, basis $XXX on end or adjusted be cash XXXX based our current to estimate year operating my and basis will operating million on We outlook an cash million XXXX. free implying between the XX market XXXX points we've million, by margin CapEx of more flows Given full we our flow estimates. our $XXX XX $XXX will That

ready now questions. are for We

Operator

[Operator Instructions].

Our first Swartz questions of come from Mike the Securities. line with Truist

Michael Swartz

Just maybe the outlook. out on starting

was I talked think months of the versus changes ago one marine couple just a side. of the you maybe what about on

just frame versus it of just from how about around half a because wholesale kind second half, you're unchanged? the guidelines any thinking shipment you're that. maybe in guess, perspective, maybe, about So now is Is I maybe the up how prior? year Or first thinking

Andy L. Nemeth

Mike. is This Sure, Andy, Andy Nemeth.

and the looking in of dealers just alike at the we're with -- that engineered our -- industry look higher disciplined. geared OEMs and and sector. pontoon looked towards we we've As mix remain sector well lines seeing at total, ski We at model, very, kind and of we presentation as business concentration we're sector across and really the in looked product wake as very strong

when do XX% continuing than We back And felt bit, a in the it that just expected the greater stabilization what we little quarter, and through and prudent than we wake seen with of of back at I pontoon. some new decline especially model so XX% a greater half. that we pull was kind noted ski in kind decline given see especially we've think when discipline in look second the to

we especially to just industry-specific little it just So our as concentration. relates a pulled things bit. back

Michael Swartz

better into I quarter think first the basis? quarter, get And a -- those be first a you most Is on last year-over-year done the that categories the on in kind saw basis? Because the of would quarter. was destocking year-over-year second that decline restocking rate the of does continues Or of in or the thought key thought of it some year. was

Andy L. Nemeth

rates that through Yes. at going kind We run time. to QX continue QX in think point still are of this

really So kind of that's that model. driving

Michael Swartz

Okay. Any trend year, year. thoughts on just operating the That's helpful. for just the that -- the margin play And on through should the that. outlook then you've out or reiterated of how on kind

and would the time of higher year. second years over of any the the drops maybe on to has is over year period look of the rest your I it margin, given which But the margin comments this seasonally, expected different is than off that highest prior? think one quarter Marine, that be kind

Andy L. Nemeth

to still at improvement, I'm talking we So think of for year quarter we're going in each margin quarters well sequential looked see it. And diversified business we've as the and over our our is prior XXXX.

Our component highly a business strong marine highly margin engineered, has is innovative.

And so some XX bit we our mix, just of keep as little that talked back segment business some bps it that a to like, we improvement. want -- particular, the again, we XX of the of strength seen with felt pulling at just offset that with we've about with in housing the to

in some think margin some kind quarter that would in prior over of feel expect as half relates business, some the on see quarter marine it that we lift see to we if a consistent again we we each improvement see pretty back uptick financials. I the But will to our year's overall that.

Michael Swartz

super one just helpful. And then last for one me quickly. Okay. That's

M&A, stuff. good Just was, I the on a the growth, pricing, the basis, volume, much all revenue year-over-year organic components guess, that how quarter of

Andrew Roeder

down was Acquisition Sure, and share up And was X%. Mike. organic was by Roeder. QX, content industry growth is down Andy up is organic down pricing This X% up X%. overall X%. was was and that X% for broken Yes,

Operator

questions MKM. with the Scott line come of next from Stember ROTH Our

Scott Stember

to the pricing guys having OEMs the side going I imagine where looking. you are discussions RV be that on is right on their with now,

guys look this content the off pricing And in bigger 'XX It to year? end? at one got morning that a your with to sounds standpoint material from see how dealers. like a on you a of 'XX. the of expecting are Just should call they're we not the balance change throughout from What hearing

Jeffrey Rodino

Scott, this Yes, Jeff. is

price And As our go every our commodities we've we the into seen through a and the into of product model we're appropriately going out. model lot flatten year. we year, go year, --

this inventories talked in on the the pricing we've we've fourth quarter and along we seen stand. past, flatten of out our of kind As with first do year. And commodities and real-time a over into the pass lot those quarter where a basis of

down. some there's So

and It's kind same flat. say, saying thinking we're I they're flat. that the what commodities We're particular the to out would putting going In deal you're pricing seeing the about earlier to of, there. almost be from our

Steve O’Hara

it. looking the just aligned deeper just dive. into powersports of talked utility business how considered piece. of I much mission-critical. side And would just can a use maybe could side-by-side you sense heavily bit we the a much little are Got how be it, know the more take get maybe about you've overall, But with of guys utility pretty you things trying utility, powersports a mission-critical or or to of of importantly, then types

of tapers Just that this to this -- really get industry sense expect year. the should to we this lot how the perform a in trying off a business event

Andy L. Nemeth

going see look our power spread market, content sector across look continue in as drive motorcycles. as to we're we expect to when our -- down, that overall you're going talked utility to bring to now particular, at those categories we rise the and and at amongst the little on model in a primarily, but look we we about in sports customers. that to utility, right side-by-side the about into When opportunities we're golf is the again units you include which organic seeing and our carts recreation a content bit that thinking the power market the product Scott, at solutions sports,

share taking on aggressive content. there gaining to market expect we and very be

of while little today, a place at utility, aligned look we're recreational a in with is if bit utility. market So the volatile of just overall, well versus the kind you

Steve O’Hara

sure I this There I question. it. just basis last hear make then margin points. Got a growth to And for heard year. comment Did want XX was operating just about correctly. expectations I

Jeffrey Rodino

basis points. XX to XX

Operator

line questions KeyBanc with Our Markets. Noah of Zatzkin Capital come from next the

Noah Zatzkin

noticed guess the expectations you RV I on ticked on kind industry. the side. just of guys I down slightly wholesale quick your

that? wondering a have what to relative to may just So led few ago, months

Jeffrey Rodino

Noah, this Jeff. is Yes.

we've on XXX XXXX, second to the interest from prior our rates going we production not we've stable that were quarter as as pretty the through going thought. As model, gotten quarter. into believe they're XXX We down first or OEMs Fed and the at at not into to go seen the rates looking least we saying down soon that

think constrain going I from we interest second of saw maybe that. where levels, wanting we to dealers little that -- to to see inventory bring rate with the it's in especially continue year, a of in at bit those the higher some thought half might relief,

to moved a just much. not we tick, So too

model going that note are very disciplined with OEMs very, being the also their We levels. production into the change,

we June, ramp and XXXX the production XXXX down start and starting they'll start into get get So to to July. -- into as the in

that So period. of those there we over see a over -- falloff little time bit

change, a much bit we're but on just it. a little not cautious overall, being of So

Noah Zatzkin

well Maybe could for if Great. performing X-parter. term? of And relative on just kind maybe kind in kind Sportech of to as just the expectations early your you M&A of appetite other how as nearer about talk

Andy L. Nemeth

today. collaboration performing really pleased We're Sure, expectations This alignment, is only the seeing we're the so the performance, is team's but better than not fit, cultural Andy. far. the Noah. with Sportech

we on As we're of see quickly execute to synergies really and runway very, very a noted, striving there. ton

performing than is it expectations. better with So very Sportech, pleased and

strength appetite of our we cash of we a well, our a perspective. from as as flows our managing position at we are think in noted for well. ton as look We're We've acquisitions, liquidity. extremely I got

to about and thoughtful disciplined Our fabulous very and of inventories a our doing team working is our extremely that. manage job be customers with

of be And say actively sense would pipeline, point looking appetite, at are at cultivate what and acquisition offense, the prioritizing are could but in position strength continuing at right actively again, on make a acquisitions to now. time, I looking again, we really our what acquisitions is and So to we organically.

Operator

of Our BMO come next from questions Capital Thomas-Martin the Tristan Markets. with line

Tristan Thomas-Martin

trended quarter, a basis, RV year-over-year in the how XX-month then talk both you maybe specifically to on just Can and not content quarter-over-quarter. trailing

shipment to being revenue trying XX%. the X% your Just square to growth up

Jeffrey Rodino

the this was about XXXX Tristan, up the Sequentially, quarter. is of Yes, quarter first fourth Jeff. X% RV from to

and seeing we are will that that, that we believe the trend will continue So year. through --

Tristan Thomas-Martin

Okay. how so kind the ongoing guess industry kind of given pressure? seems the you to the just the standpoint, delta on ASP outperformed of much a I shipment of

Andy L. Nemeth

Tristan, been be up over the has really marketplace our -- sure picking we're working active in position really team making able on down the pricing the as our well. service quality last XX on as vendors to again, to push of take well business, months, Yes. them, but bring care but We've And the to we've, side, that you, both our worked tell to and with again, I and the managed in would costs side. customers, inventories also as our best commodity

really prices through those active to We as in customers. our we're mentioned, Jeff are pushing --

of the as space. result, balance content our up with the quality and customer RV of base. job pricing great have done teams a And in RV picking a maintain service a we and more organic So spectacular

Tristan Thomas-Martin

deceleration to way? a believe thinking in Okay. right get the That March. it And then to just one more, XQ big that retail pretty I was implies about down Am XX%. year, RV I

Andy L. Nemeth

Say really your again. I it question. understand want to

Tristan Thomas-Martin

Yes.

you I both called year-over-year. out down February than But that was would So there, think XX%. point. missing and imply RV Am January I to retail, down any get March more

Andy L. Nemeth

it's a you, estimates, bit With correct. we more and down would than February, little the tell January

Operator

from questions with come of line Our Craig Baird. next Kennison the

Craig Kennison

April color terms consumer? in month on demand maybe see March. of but RV impact continue Any addressed You've follow-on. the of many we on as question the That last a high of trends to them, interest rates

Jeffrey Rodino

pretty bit of through what over at earlier, to so our ahead that little look We looking I we've seen we see do time taken this From the this April, a bit. mentioned would Memorial tell and you little production Craig, off are Like I being with perspective Jeff. May year. consistent is what a they've far levels, holiday. stayed the Day

So pretty bit our of have weekly levels production a levels little But overall, level the lose consistent. customers there. we'll stayed of --

Craig Kennison

wondering if I'm your front, business any you higher know color margin there. the basis on to tends puts the points. on XX takes be marine getting to I can Then just share to and margin. XX

You've if wondering rolling in XX understand all I'm and help can got to you through. to get how your XX businesses. Sportech the downs individual us you just ups points basis with

Andy L. Nemeth

organization you are this and takes. the at think and a about which we Craig, think fantastic business, lot highly at Andy. team cost the There the a diversified the I model That given look we're is job doing team's housing business, there. performance. a of you that's When low done what fixed has when across puts as business really is our look when there, leverageable structure definitely well

great job [indiscernible] there side of up the of picked housing business, that business a done business. but the on the managing we've They've also and

certainly product. our product, bit higher model that It offset margin leveraging we're side as relates through. helping what higher-priced just with supporting given the and seeing to of of the mix products a seeing Marine a it is business, kind on worse little profile So we're really in engineered is selling a what we're performance the the that

at model. industries performance, look the model XX industry as takes. I supporting we're are lot it's so course to impact of the goes very resilient. margin-accretive going that well. you And last when us the just buying And about to look But think that businesses we've that it. done, I'm months, very, over when There's be the some at to then the XX into that the say a and have and on you acquisitions the allowing our does yes, when But puts and

And place increase acquisition with margin that of throughput we've and put that [indiscernible] strive initiatives we to as So provider in we're a execution then drive the the ability automation margin profile. strategy produce all be it's in that we able really the into look have component at a the go-to value as of combination increased quality. just customer solutions the a to lot team's things to our resilience again, diversification, marketplace played to customers that the for

Operator

Securities. the line Daniel come of Our from next questions CJS with Moore

Dan Moore

Andy, to higher content But good content RV side, Cover just QX and slightly marine. the you. ground. morning. of a per lot in on ticked Welcome

flat said you think I sequentially.

on on might grow can units bottom from the found keep continue ads that we that for entry-level likely more metric. or we pressure some think to to consumers You which opt

Andy L. Nemeth

puts at business I like general. a have we here. we to takes model on. bottomed up. may that continue sequentially as we've we content But the of There look with would think content [indiscernible] we expect as today, to the feel kind go especially forward, we feel small like we be brought going look few and at overall, in

at there the one we're this, level, out think that a concentration market different product -- you on is a development, of things the in and really higher there's product lot and about sorry, the consumers of about the conditions innovations new innovations I pursuing the OEM when actively space in I'm and or excited customers think other today. like aggressively we're

product as along new and a working and today, especially out, get lot we some our on, we go market content when we sit we we've with with uptick we that kind with X, look pretty business models model at out customers bringing about the where where once solutions of So with but only we flat, to excited mentioned. bouncing bottom the can brought not the that we're of year current X-year on market doesn't think

question, bottomed. answer go is we to content sequentially continue up. your So -- We the to expectation do believe expect long our to but it's

Dan Moore

had the now. months of Very helpful. under couple umbrella and for Sportech on Sportech And a [indiscernible], you've

internal but you opportunities you some initial or -- already initiatives Just that in that to -- how the drive place, where meetings relative cross-selling expectations sales to taken about few you've opportunity going? of content just that would over next you your the talk the see described characterize and years had those or

Andy L. Nemeth

for innovation, advanced the team's doing that been They've Yes. we talk products. while exists opportunity about there. well. excited again, that about are that With We a definitely as

that product you can so market our And with into, of in we product very we lines of for lot the those a a the solution look customer there's really they're be higher value to think what alignment space compelling as some product bring incorporating the again, product to of delivering enthusiast today value-added opportunity products we a base with for for at and end that additional bring consumer. that sticky can a solution, that think in combinations

say or of at So our anticipated. than what kind better I are expectations would we

Dan Moore

table priorities on capital Great. buybacks the given the And like M&A opportunistically. allocation talk sound potential you lastly, months flow debt reiterated, cash could paydown versus about it for M&A maybe just the XX your be strong does that next outlook versus

Andy L. Nemeth

sure. Yes,

That's automation as we So that I to from been reinvesting continue stay going we're focused quality. initiatives think going look in We're our business. and to at allocation, sure successful capital increase throughput very we're perspective. to on making the pursue that

remain We're to of we're business. capital the So to deploy there. buyback to going continue the opportunistic on side going

got execute the forth. a based always it as to will we in place that relates return we've marker model we've put that And grid upon on

given on execute that, about -- always front, there buyback. pipeline got the looking quarter, exists sure, at we're or very monitoring then that are do we're the whether we a We've the today. So the we for excited liquidity. we out not in actively And actively acquisition

able our capital the as to we be leverage structure to to bringing immediately in do Sportech well, look expect so. we've upon support as that profile, following deliver got been continue profile at to We've acquisition to a and down able which especially continued

we and actively continue as think want opportunistic acquisitions and we've to to to them. relates it as I offense remain pursue on mentioned So

Operator

Rolle Our D.A. next come Davidson. line questions the of Brandon from with

Brandon Rollé

and dealer to you channel First, strong year-over-year inventories had just XXXX. wholesale flat stated can year given you fill shipments on think confidence gives I mentioned the a expectations Sportech, the very for so flat. lapping What in industry be also be

Andy L. Nemeth

This is Nemeth. Andy Brandon. Sure,

and inventory the then at when of the there That's gives we the today. exists see of channel we to as look of combination business the Sportech, confidence kind focused. relates is we the primarily at it utility the business. that demand, backlog at us in As our Sportech. utility look that exists of And again, that levels what side the where is stability that sector Sportech in

as on, profile That as demand was of So the then solid and well gain pursue one again, it. in Sportech performance. has that utility to confidence that. things kind That looked the we coupled of we at Sportech that. we backlog that sector see with but confidence And that's a driving really

Brandon Rollé

then question. one And other just Okay. Great.

it process currently, of 'XX RV the year model commentary you industry seems 'XX rates. bidding like Could bidding OEMs couple increased competition within year on think are state the given get issues on. the has been potential lower, past of or over affordability I any the competition prices Any going and the to months, elevated comment on looking -- within process? interest the industry model

Jeffrey Rodino

the year, Jeff. same process. go Every of is kind bidding we this Brandon, through Yes,

[indiscernible] making in we're have And one we're categories. our the every pushing kind vendors along so there. we competition in pricing the well always product automation, our that be to We categories, as best-in-class product that sure of our on obviously our of there to is our efficiencies customers. out to of can working as hitting all pass get

aggressive So in that. certainly, We've product out where every the being we got competition we're pushing But competition. of there always dealing we're with one and lines.

Operator

[Operator Instructions].

from come questions Perry the America. of next Alex Our Bank line of with

Unknown Analyst

Powersport should year. phasing build color of whether the our can with any the segment on seasonality Sportech expectations just we I you for of it's about color you should business guess thinking or can more give specifically, any in we the be for models any I sort the contribute as on the first, guess, sort get up?

Andy L. Nemeth

is This Yes. Andy.

we kind at of think run of kind existing we seeing or we're rates today. seasonality, I current run look as expect rates that

for of around Patrick space today. as million powersports kind of whole at year, look overall for the $XXX in we're we revenue estimating powersports As that a

where it So the solutions kind to market or table. continue business, -- up relates bringing we geared, as like let's of we're pick flat market we're on up as products, especially but again, where organic to with growth focused, gain additional content call growth also it, content organic feel we flat to

Unknown Analyst

follow-up just on helpful. And is really Marine. That's my then

said XQ. guess I into in XQ what gives decline to improvement similar I you Marine half, to the you the we should the that move you start confidence as back an think see business?

Andy L. Nemeth

Sure.

and job to in I retail lot solid it innovating traffic The of innovations continuing looking relates at marine interest. the the we're Marine, we fabulous there. out resilience There's product to of space. do think see there a as at a push level, is envelope OEMs the do as and

and in out inventories in balance. half we 'XX don't at, look So feel marine that also like believe of the year the demand there out and we the a kind lack market's hitting come and just do we lack that there the model attractiveness anticipation the of kind channel are new nor of now, where we as believe is of right of the at do there's a innovations -- in feel of in that back we product

aggressive We think the in managing with the been extremely have in alignment production OEs dealers.

a think demand discipline. what of in along seeing for date here we're And on from kind and tremendous out QX, expect the QX. new still of the we just so especially soft that look bottom. higher a especially It's perspective lot components. been macroeconomic of through today at that through with To concentrated to we're continue, the there's and we There's innovations, that just kind there, model bouncing and

So still to that's overall, mix. is make certain towards we're prudent as market again, sure according the the was thought at with to to kind But we looking look demand we confidence out product the some at things, what categories again, of space. in there, gives again, resilience we our that that it us wanted half seeing stable. see we'll And that the and back we're --

Operator

and Ladies I you. Nemeth will to for Andy remarks. closing Thank it turn gentlemen, over back

Andy L. Nemeth

manufactured more the of to outdoor housing being period over evolve marine, again the the and Thank in what evident power tenacity time possible. who ability I call that today. you. this do these and supplier team a company from to diversified housing RV, supplier choice Patrick's industries we a past made the amazing to space. goal end of a leadership, XX the for Their partner is to supports thanking into have our company passion want grow we once are years by members and enthusiast our as sports

business, We and good of Thank for while will optimizing health. support. our your our continued operational be financial of continue stewards transformation accelerating you to much company very the

Operator

you Thank This gentlemen. for concludes teleconference. participation. and you, ladies your today's Thank

now may You disconnect.

Patrick Industries (PATK) 2 May 242024 Q1 Earnings call transcript