Patrick Industries Inc. (NASDAQ: PATK) Qianyi (Cathy) Han Guanrong (Rachel) Fu Jingfeng (Jeffrey)Li Presented: April 29, 2014

AGENDA  Business Overview  Macro-Economic & Industry Overview  Technical Analysis  Financial Ratios  Valuation  Recommendation

 Incorporated in 1959, in Indiana  3600 employees  Market Cap : $455MM  16 Warehouse and distribution centers & 18 manufacturing operations  Business :  Manufacturing: Suppliers to other industrial markets, such as household furniture and manufactures for various products, such as hardwood furniture  Distribution: Wholesale distributor of pre-finished walls and other miscellaneous products Source: PATK 10-K Report, CapitalIQ BUSINESS OVERVIEW

Source: PATK 10-K Report PRODUCT OVERVIEW

Source: PATK Website

Source: PATK 10-K Report ACQUISITION OVERVIEW

Source: PATK 10-K Report SALES NEWORK

Net Sales  Consistent growth  Improving total return  Significant increase in RV industry  Stable Growth in MH and Industrial market Source: PATK 10-K Report FINANCIAL OVERVIEW

MACROECONOMIC OVERVIEW  Recovery from recession  Consumer discretionary income  Global trend of time and money spent on leisure  Credit regulations and lending in housing starts and mortgage market aided by Fed  Price of gasoline and diesel fuel  Price of raw material/commodity: wood, steel, fiberboard, gypsum Source: IBIS World

 Manufactured housing:  Rebound from weaker demands in housing starts back to 2009 and 2010  Increased substantially (32.9%) in 2012 following the recovery of recession  Private spending in housing construction and improvement is expected to grow till 2019  Greater sales of existing housing will stimulate the renovation  Lower cost of construction than site-built homes Source: Manufactured Housing Institute IBIS World, Manufactured Home Dealer in US INDUSTRY OUTLOOK

 Recreational vehicle:  Financial crisis disrupted credit flows and lowers buyers capacity to finance their RV purchases  After 2013, RV sales is expected to grow at 3.2% steadily  Shipment declines from 2007 to 2009, but rebound from 2009 to 2012 by 72% Source: Recreational Vehicle Industry Association IBIS World, Recreational Vehicle Dealer INDUSTRY OUTLOOK

Cost Comparisons of Vacations Using Recreational Vehicles Versus Other Types of Vacations (4-Person Travel Party) Vacation Mode of Travel3 Days7 Days14 Days $721$1,634$3,158 $880$1,997$3,854 $880$2,035$4,033 $930$2,149$4,232 & $1,128$2,906$5,456 & $2,958$4,045$6,792 Source: PFK Consulting, USA Source: Recreational Vehicle Industry Association IBIS World, Recreational Vehicle Dealer  Recreational vehicle:  Number of aging (35-54) consumers enter retirement (baby- boomers)  Lifestyle trend: healthy, outdoor activities, pet friendly, quality family time

INDUSTRY LIFE CYCLE  Maturity stage in RV and MH:  Increase in market share through strategic acquisition  Stable cost structure and brand reputation  Facing fierce competition Introduction Growth Maturity Decline Time Total Industry Revenue Source: Recreational Vehicle Industry Association IBIS World, Recreational Vehicle Dealer

PORTER’S FIVE FORCES Competition: HIGH Few patent and rights Many manufacturers and distributors provide similar products Substitute: MEDIUM RV versus rental cars and airlines MH versus alternative housing: site-built home and townhouse, apartment rentals Bargaining power of Suppliers: MEDIUM Wide range of raw material suppliers and low differentiation: steel, plastic Relationship with different suppliers to reduce too much dependence Bargaining power of Buyers: HIGH End-users are sensitive to price Forecast interior design trend may change every year Easily supplanted by next year’s new model Entry barrier: MEDIUM Does not require high technology and innovation Expansion to new product lines through acquisition Source: Patrick Industries, 10-K. 2013

OpportunitiesThreats Diversification and flexibility to operate in other industrial markets Plant expansion increases capacity utilization and production of better functional building products Increasing in the baby boomer population Sensitive to world economy and consumer sentiment Forecast based sales requires accurate estimation and quick adaptation to new models Possible decline in popularity of camping and motor home travel due to high gasoline price Source: Patrick Industries, 10-K SWOT ANALYSIS StrengthsWeaknesses Competitive price with high quality standards High degree of flexibility from suppliers “Customer 1 st ” performance oriented culture to retain talents Strategic acquisition to support new product lines and expansion into new markets at existing logistic network Not concentrated in few product types Too many brand names from acquisition High concentration at RV industry

Source: Yahoo! Finance TECHNICAL ANALYSIS

Source: Patrick Industries, 10-K FINANCIAL RATIOS

Source: Patrick Industries, 10-K. 2013

VALUATION - COMPS

$43.21 Estimated Share Price Multiple Multiple Value Price (using subjective weights) P/E – 25% 23.2x$51.99 EV/Revenue – 25% 1.0x$50.67 EV/EBITDA – 25% 13.2x$45.31 P/B – 25% 3.2x$24.88

Source: Patrick Industries, 10-K Yahoo! Finance VALUATION – Discount Rate

Source: Patrick Industries, 10-K VALUATION – Projections

Source: Patrick Industries, 10-K VALUATION - DCF

VALUATION - Result Current Stock Price: $41.73 Our Valuation: $41.51

Source: Patrick Industries, 10-K RECOMMENDATION WATCH LIST Future Outlook and Concerns Stable growth in RV industry against high energy costs Any cost saving from acquisition in the future (e.g.. SG&A) Opportunity to diversify into other industrial markets