Patrick Industries(PATK) - 2022 Q4 - Annual Report

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].