Patrick Industries(PATK)2025-02-20 21:11Market Trends - The marine market has seen a decline in consumer demand, particularly in the powerboat sector, with OEM production decreasing further in 2024 due to economic uncertainties, leading to a 25% decrease in marine wholesale unit shipments compared to 2023 [31][33]. - Total U.S. retail expenditures on boats, engines, accessories, and related costs fell by 2.6% to 418 million in 2024 and approximately 76 million in property, plant, and equipment in 2024 to enhance manufacturing automation and upgrade production equipment [50]. Customer and Sales Information - As of December 31, 2024, the company had approximately 4,500 active customers, with sales to major RV manufacturers Forest River and Thor accounting for 29% of consolidated net sales in 2024 [56]. - The company has experienced seasonal sales trends, with the highest sales typically in the second quarter and lowest in the fourth quarter [67]. Financial Obligations and Risks - The company’s total debt obligations as of December 31, 2024, were 2.2 million for a 100-basis point increase in SOFR rates [237]. - The company is exposed to commodity price volatility, particularly for key raw materials, which may affect pricing strategies [238]. - The company’s 1.75% Convertible Notes are subject to market risk, with their fair value increasing or decreasing based on the common stock price [239]. Human Capital Management - The company has implemented various human capital management programs, including free assistance programs for mental health and tuition reimbursement [70]. - The company’s investment in human capital resources focuses on ensuring the well-being and success of its team members [69]. - The company’s leadership development programs aim to foster an inclusive culture and retain highly qualified team members [72]. - The company has a commitment to safety and well-being in the production environment, including OSHA preparedness and ergonomic assessments [70]. - As of December 31, 2024, the company had approximately 10,000 team members, with 80% being hourly employees [68]. - The company has a diverse executive team with extensive experience across various markets, including RV, marine, and powersports [74]. Research and Development - The company’s research and development efforts aim to maintain leadership in core products and develop new technological capabilities and applications [55]. - The company maintains a balanced inventory level with expected OEM production, continually exploring alternative sources for raw materials [60].