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patrick industries, inc. (patk)

by:KingKonree     2020-02-06
Washington, D. C. Securities and Exchange CommissionC. 20549FORM 10-K(Mark One)
Annual reports submitted under sections 13 or 15 (d)
According to sections 13 or 15, the Securities Trading Act of fiscal 1934 31, 2018 or the transitional report (d)
The Securities Trading Act of 1934. . . To. . . Provisions of the transition period
03922 Pa trick Industrial(
The exact name of the registrant specified in the articles of association)INDIANA35-1057796(
State or other jurisdiction registered or organized)(I. R. S.
Employer identity number)107 W.
P Franklin StreetO.
Box 638 Elkhart, El15 (
Main executive office address)(Zip Code)
The registrant\'s telephone number, including the area code :(574)294-
7511 securities registered under article 12 (b)
Part of the act: Common stock, stock market limited liability company without face value (
Topics of each class)(
Name of each exchange registered)
Securities registered under article 12 (g)
Key points of the act: if the registrant is healthy, it is not indicated by a check mark
Well-known experienced issuers as defined in Rule 405 of the Securities Act.
Yesx no \"indicates by check mark whether the registrant does not need to submit a report under Section 13 or section 15 (d)of the Act.
Indicate whether the registrant (1)
All reports requested by Article 13 or 15 have been submitted (d)
Securities Trading Act of 1934 within the first 12 months (
Or a short period of time required for the registrant to submit such reports), and (2)
This filing requirement has been bound for the last 90 days.
Whether or not the person with the Yesx No \"Indicate check mark is also submitted in electronic form and posted on its company website (if any), each interactive data file is required to be submitted and is subject to article 405th S-
12 months before T (
Or in such a short time that the registrant is required to submit and publish these documents).
Yesx no \"indicates by check mark whether the applicant in arrears is disclosed in accordance with section S-405 of the regulations
To the knowledge of the registrant, K is not included in the final proxy or information statement referenced in Part 3 of this Form 10 and will not be included in it
K or any amendments to this form 10K.
Indicate by check mark whether the registrant is a large accelerated declarant, a non-accelerated declarant
A smaller reporting company, or an emerging growth company.
See the definition of \"large accelerated reporting companies\", \"Small reporting companies\" and \"emerging growth companies\" in rule 12b-
2 of the Trading Act.
Non-accelerated files for large accelerated files
Acceleration fee (
Do not check if there are smaller reporting companies)
If an emerging growth company, a smaller reporting company, is an emerging growth company, indicate by check mark whether the registrant chooses not to use the extended transition period to comply with any new or revised financial accounting standards provided under section 13 (a)
The Trading Act.
Indicate whether the registrant is a shell company by check mark (
Defined in Rule 12b-2 of the Act).
On June 29, 2018, the last working day of the second fiscal quarter recently completed by the registrant, the total market value of the common stock of the registrant held by the non-registrant
The subsidiary is $1. 3 billion.
As of February 15, 2019, 23,872,003 ordinary shares of the registrant had been issued.
The documents contained in the reference section of the proxy statement of the AGM to be held by the registrant on the 15 th of 2019 are incorporated by reference into Part 3 of this Form 10-K.
Patrick IndustrialFORM 10-
Financial year ENDEDDECEMBER31, 2018 forms for ContentsPART IITEM 1. Business 1A.
Risk factor 1B.
Unresolved employee reviews 2.
Property item month.
Legal action 4.
The third part is the fifth mine safety disclosure.
Market for registrant common stock, related shareholder matters and issuer to purchase equity securities
Selected Financial Data Items 7.
Management\'s Discussion and Analysis of operating conditions and results
Quantitative and qualitative disclosure of market risks
Financial statements and supplementary data items 9.
Changes and disagreements with accountants on accounting and financial disclosure project 9A.
Control and procedure 9B.
Section IIIITEM 10 of other information.
Project 11. Director, executive officer and corporate governance.
Item 12 of administrative compensation.
Secured ownership of certain beneficial owners and management and related shareholders.
Relationship with directors and related transactions.
Main accounting fees and services section IVITEM 15.
Annex and schedule 16 to the financial statements. FORM 10-
Statement of Financial Statements and statement of financial statements of independent certified public accountants, statement of financial status consolidated statement of shareholders\' equity Consolidated statement consolidated financial statements notes on forward information-
This annual report on Form 10
K contains certain \"forward-
\"Outlook statements\" in the sense of the Private Securities Litigation Reform Act of 1995, involving financial status, operational results, business strategies, operational efficiency or synergies, competitive position, industry growth and forecasting, opportunities for growth of existing products, plans and targets for management, common stock market of Patrick Industrial Co. , Ltd. (
\"Company\" or \"Patrick \")
There are other things.
This form 10-
K and other statements contained in the annual report and statements contained in future documents submitted to the Securities and Exchange Commission (“SEC”)
And the public dissemination of press releases, as well as statements that may be made from time to time by the company\'s management when introducing the situation to shareholders and potential investors, other people who are interested in the company\'s business and finance, are not historical facts.
Forward-looking statements involving risks and uncertainties may result in significant differences in actual results from forward-looking statements
Look at the report.
There are many factors, many of which are beyond the control of the company, which may lead to significant differences between actual results and events and those described in Future Outlook
Look at the report.
Many of these factors are identified in the \"Risk Factors\" section of table 10
K specified in Item 1A of Part I.
These factors include, but are not limited to, the effects of any economic downturn, particularly in the residential market, the decline in free consumption spending, pricing pressures due to competition, costs and availability of raw materials and commodities, impose restrictions and taxes on imports of raw materials and components used in our products, information technology performance and safety, availability of commercial credit, availability of leisure vehicles, vessels and retail and wholesale financing of residential and manufactured goods, availability and cost of labor, inventory levels for retailers and manufacturers, the financial status of our customers, the retention and concentration of important customers, the ability to generate cash flow or obtain financing to fund growth, the future growth rate of the company\'s core business, the seasonal and cyclical nature of our product sales industry, improving efficiency and reducing costs, successfully integrating the realization and impact of acquisitions and other growth plans, rising interest rates and oil and gasoline prices, and the ability to retain key managers, adverse weather conditions affecting retail, our ability to comply with credit agreement covenants, and general economic, market and political conditions.
In addition, national and regional economic conditions may affect the retail sales of leisure vehicles, vessels and residential and manufactured homes.
You should think forward.
Therefore, based on a variety of important factors, including the factors specified in the Company\'s reports and documents to the SEC, including the Annual Report of Form 10
K is the best year of 2018.
Any forecast of financial performance or statements regarding expectations for future development should not be interpreted as a guarantee that such results or developments will actually occur.
No forwarding is guaranteed-
The outlook statement will be achieved, or the actual results will not be significantly different from the results presented in such a Outlook
Statement.
Patrick does not commit to publicly updating or modifying any forwarding-
Except as required by law.
For further discussion, see Item 1A, Risk Factors, Part I below \". PART IITEM 1.
Unless otherwise required by the context, the term \"Company\", \"Patrick\", \"we\" or \"we\" refers to Patrick Industries, Inc.
And its subsidiaries.
Company overview Patrick Industries
Founded in 1959 and established in Indiana in 1961.
Patrick is a major manufacturer of component products and a distributor of building products and materials serving OEMs (“OEMs”)
Mainly in leisure vehicles (“RV”)
Housing made (“MH”)
There is also the marine3 market.
The company also supplies products to neighbouring industrial markets such as kitchen cabinets, office and home furniture, fixtures and commercial furniture, as well as other industrial markets.
The company operates through a nationwide network that includes up to now 2018,107 manufacturing plants and 42 warehouses and distribution facilities located in 22 states in China, Canada and the Netherlands.
The company, through its network of national manufacturing and distribution centers for its products, operates within two reporting departments of manufacturing and distribution, thereby reducing
Shipping delivery time and cost of manufacturing footprint in customer area.
The manufacturing and distribution sectors accounted for 77% and 23% of the Company\'s consolidated net sales in 2018, respectively.
Financial information about these business units is included in note 20 to the consolidated financial statements in this Annual Report on Form 10 --K (the \"Form 10-K\")
And incorporated into this article by reference.
The company\'s strategy and capital allocation strategy is to optimize the management and utilization of its resources and continue to grow and reinvest in its business using its operating brand platform.
Patrick, through strategic acquisitions, geographical expansion, expansion of new product lines and investments in infrastructure and capital expenditures, seeks to ensure that its operating network contains capabilities, technical and innovative thinking processes that support expected growth needs, effectively respond to changes in market conditions, inventory and sales levels, and successfully integrate manufacturing, distribution and administrative functions.
Over the past three years, the company has implemented a number of new product plans and invested about $0. 734 billion to complete 23 acquisitions involving 34 companies, this directly complements its core capabilities and existing product lines and expands its presence in the marine industry.
Benefit from the combination of improved economic conditions and demographic trends in RV, MH and marine industries, as well as the implementation of the above strategic initiatives, resulting in increased sales, operating income, net income and cash flow over the past few years.
The main administrative and administrative office of the company is located at Franklin Street, West 107, Elkhart, 46515, Indiana telephone number is (574)294-7511;
Website: www. patrickind. com.
Information on Patrick\'s website is not included in this form by reference 10-K.
The company is provided free of charge through the website, its Annual Report of Form 10-
Quarterly Report on table 10
Q: Current Report of Form 8
K and all amendments to these reports submitted electronically to or provided to the SEC, as soon as reasonably practicable, after these materials are submitted electronically to the SEC.
The 4 major product families produce and distribute a wide range of products within their operations, including: manufacturing and distribution of furniture, shelves, walls and counters laminated products
Finished wall and ceiling panels decorative vinyl, wrapped vinyl, paper laminated panels and vinyl printed drywall and drywall finish products solid surfaces, granite and quartz offset aluminum paper made from interior and exterior lighting products and custom Electronic Products and audio system components electrical system components for hard wood profile mold transport and logistics services, instrument and dashboard included
Exterior and sheet gauge and processed lumberCabinet products, doors, components and custom fiber reinforced polyester (“FRP”)
Fiberglass bathroom fixtures and tile system roof products professional bathroom and closet building products fiberglass and ceramic flooring boat covers, towers, tops, and framesshouwer doorsSoftwoods lumberfuritre interior doorsFireplaces pass and surroundswirng and wire molds and composite partsTileAluminum fuel tanksOther Miscellaneous product sslotwall board and component SRV paintingThermoformed shower surroundsfiber glass and plastic parts, front and rear covers and ocean helmsolmer-
Sprimary marketrick, headquartered in flooringAir handling, produces and distributes its building products and interior decoration component products for the four main markets for its services.
The operating facilities that supply the company\'s products are strategically close to the customers they serve.
The company\'s sales according to the market are as follows: 63% 69% Marine12 % 7% MH12 % 13% Industrial 13% 11% Total100 % 100% 5 leisure vehicles continue to grow with the original equipment manufacturers of RV vehicles, the RV industry adjusted their production levels in 2018 as dealers rebalanced their inventory in the retail market.
According to the Association of recreational vehicles (\"RVIA\")
Compared with 2017, total wholesale shipments in the RV industry fell by 4%, with total shipments reaching 672 units, the second highest since 1973.
The main types of recreational vehicles include (1)
Towels: traditional travel trailers, Round 5, folding camping trailers and truck campers; and (2)
Motor: car home.
The company estimates that its RV revenue portfolio related to traction units and motor units is consistent with the production portfolio across the RV industry.
In 2018, the unit shipments of traction and mobility accounted for about 88% and 12% of the total wholesale shipments of the RV industry, respectively.
Compared with the previous year, the traction sector decreased by 4% and the mobile sector decreased by 8%.
The Company\'s RV products are mainly sold to the major manufacturers of RVs, smaller OEMs, and manufacturers in neighbouring industries.
The RV market is dominated by Raytheon industries. (“Thor”)
Forest River Company(“Forest River”)
According to the report of the statistical survey company, the two companies accounted for 84% of the retail market share of towels and 61% of the market share of mobile equipment. (\"SSI\")for 2018.
The purchase of entertainment vehicles is usually a purchase of consumer discretionary income, so any situation that raises concerns related to discretionary income may have a negative impact on this market.
The Company believes that,
The retail sales and related production levels of RVs will continue to depend on the overall strength of the economy, the level of consumer confidence, stock and securities market trends, fluctuations in dealer inventory, disposable income levels and other demographic trends.
Population and ownership trends continue to point to favorable market growth in the long run, as outdoor, natural environments are changing
Based on tourism activities, the \"millennials\" of the majority of the population accept this outdoor lifestyle and enter the RV market.
According to the 2018 KOA North American camping report, 40% of the 23% millennials in the United States are millennials, 19 million or 83 million (\"U. S. \")
Think of yourself as height-
Probably a RV buyer.
Plus, \"baby-
The \"baby boomers\" who reach retirement age are growing steadily, with RV owners under 35 having a population54 year-
The elderly population continues to grow.
Detailed narrative information about the company\'s sales to the RV industry is included in Item 7.
\"Management\'s Discussion and Analysis of financial status and Operational Results \"(the \"MD&A\")
Form 10-K.
The marine industry in MarineThe reflects similar activity, outdoor leisure-based, family-
Lifestyle orientation is characteristic of the RV industry, which has increased its focus through recent acquisitions and organic growth, especially in the last three years, expanding its presence in the neighbouring marine market.
Consumer demand in the marine market is usually driven by the popularity of entertainment and leisure lifestyles and economic conditions.
The company\'s sales in the marine industry are mainly concentrated in the steamboat sector in the market, which consists of four broad categories: Fiberglass, aluminum, pontoons and skiing and the spirit.
According to current data for each SSI, shipments of marine powerboat retail units increased by 2% in 2018 compared to 2017, the eighth consecutive year of growth in new ship shipments.
Detailed narrative information about the company\'s sales to the marine industry is included in MD & A in table 10K.
The manufacturing house products of the manufacturing House company are mainly sold to the main manufacturers of the manufacturing House, other original equipment manufacturers, and to a lesser extent to the manufacturers of the neighboring industry.
Overall, the top three manufacturers produced about 79% of MH market retail unit shipments per SSI in 2018.
Although wholesale unit shipments in the MH industry increased from about 49,800 in 2009 to 96,540 in 2018, they are still far below historical levels.
The Company believes that the market has a lot of upside potential under the impetus of long-term depression.
Increased demand, more
Population trends such as household housing capacity, improved consumer credit and financing conditions, housing market conditions, improved levels of consumer confidence, increased affordability and quality, first-time home buyers and people who want to scale down, raise the level of consumer savings.
Factors that may have a further favorable impact on the production level of the industry include improved quality credit standards in the residential market, new employment growth, consumer confidence, favorable changes in financing regulations, the gap between MH loan interest rate and traditional residential mortgage interest rate narrowed
Construction of \"housing, and any improvement in asset conditions --
Housing loans in manufacturing support the securities market.
Detailed narrative information about the company\'s sales to the MH industry is included in MD & A in this form 10K.
According to the company\'s estimates, about 60% of industrial net sales in 2018 were related to the United States. S.
Residential market.
The Company believes that there is a direct link between the market\'s demand for its products and the construction and renovation of new homes.
Patrick\'s sales in the industrial market usually lag behind the start of new housing in 6 to 9 months, and will vary depending on the regional economic outlook.
Many of Patrick\'s core manufacturing products are also used in the market for cabinets, office and home furniture, hotels, fixtures and commercial furniture.
These markets are often classified by more performance. than-
Price-driven customer base provides an opportunity for the company to diversify its customer base.
In addition, other residential and commercial areas are less susceptible to import competition, thus providing opportunities to increase sales penetration and market share.
Over the past three years, the residential market in particular has shown signs of improvement across the country, a trend that is expected to continue in 2019, albeit at a lower level.
Detailed narrative information about the company\'s sales to the industrial market is included in MD & A in table 10K.
Strategic acquisition the company focuses on driving growth in each of its major markets by acquiring companies with strong management teams, these companies have additional product lines, facilities or other assets that align with Patrick\'s core values, business models and customer presence, as well as complement or expand its existing business.
The company may explore strategic acquisition opportunities that are not directly linked to the four major markets it serves in order to further leverage its core competencies in manufacturing and distribution, and make it the ultimate market exposure and presence.
The company invested about $337 in 2018.
6 million completed 9 acquisitions involving 13 companies.
For A description of the 2018 acquisitions, see MD & A, note 5 to the consolidated financial statements for A description of the acquisitions completed by the company in 2018, 2017 and 2016.
Competitive RV, MH, marine and industrial markets are highly competitive among manufacturers and suppliers of various components.
The entry threshold for each industry is generally low, including compliance with industry standards, regulations and safety requirements, as well as the initial capital investment required to establish a manufacturing business.
In addition, the company competes with manufacturers of manufacturing houses with vertically integrated operations.
Within the scope of the company\'s products and services, competition mainly exists in terms of price, product features and innovation, timely and reliable delivery, quality and customer service.
Several competitors compete with Patrick on a regional and local basis for each product line.
However, in order for competitors to compete with Patrick nationwide, the company believes that a significant amount of capital commitment and investment is needed for personnel and facilities.
Capacity and plant expansion Patrick has the ability to meet demand for certain products that exceed capacity by moving production to other facilities.
Capital expenditure for 2018 was $34.
5 million of the investment is used to replace and upgrade production equipment and expand facilities outside the central and western core markets to match OEM expansion, increase production capacity and provide more advanced manufacturing automation.
Management regularly monitors the capabilities of its facilities and redistributes existing resources when required to maintain production efficiency throughout all its operations, and leverage the commercial and industrial synergies of key regions to support the expansion of the customer base and expand its geographic product coverage beyond the central and western core markets.
Brand new product development is a key component of the company\'s efforts to expand market share and revenue base, adapt to changing market conditions and proactively meet customer needs.
By integrating new and innovative product lines into its operations, the company brings additional value to its customers and creates additional scale advantages, expanding the range of products and services.
The company\'s design/innovation center and showroom studio are located in Elkhart, Indiana.
The studio presents the latest design trends and products in the market of Patrick services, providing a creative environment for customers to design products and enhance their brands.
The 45,000-square-foot facility consists of a 25,000-square-foot showroom dedicated to the products, capabilities and services provided by each of Patrick\'s business units, as well as offices and meeting rooms.
The company\'s professional team of designers, engineers and graphic artists works with RV, MH, marine and industrial customers to meet their creative design and product needs, including the creation of new styles and the use of patterns, products and wood types for panels and molding, cabinet doors, furniture, lighting and other products.
Other services offered by the studio include product development, 3D CAD illustrations, 3D printing, photography and marketing.
The company provides customers with product knowledge, expertise and support specifically tailored to their needs through its operating brands.
The company strives to be the preferred supplier for its customers, working with expert product line managers to enhance the customer purchase experience and provide support and strategic partnerships for each operating brand, which helps to improve efficiency, create maximum value for customers.
Patrick does not have substantial patents, licenses, franchises or concessions, and does not carry out major R & D activities.
The company has 2018 active customers, with 2,400 of marketing and distribution.
The company\'s revenue from the RV market includes revenue from sales to two major RV manufacturers, each accounting for more than 10% of the company\'s net sales, namely Forest River and Thor.
Both Forest River and Raytheon have a number of independent businesses and brands that buy our products independently from each other.
The company\'s sales to various businesses of the Forest River and Raytheon combined accounted for 49% and 57% of our combined net sales, in 2018 and 2017, respectively.
8 The Company generally maintains the supply of various commodity products in its warehouse to ensure that products are provided to its distribution customers at any time.
The company purchases most of its distribution sector products in rail cars, containers or trucks that have been put into storage before they are sold to customers.
About 15% and 19% of the company\'s distribution division\'s sales came from products shipped directly from the supplier to Patrick\'s customers in 2018 and 2017, respectively.
There\'s usually one or two-
A week between Patrick\'s receipt of a purchase order and the delivery of a product to a warehouse or customer, so the company does not have a large backlog of orders.
During the period when the market situation is declining, the customer order rate may decline, resulting in a decrease in logistics planning and fulfillment efficiency, resulting in an increase in delivery costs due to the increase in the number of products shipped each time.
The raw material spatrick has arrangements with certain suppliers to provide terms such as exclusivity, pricing structure and rebate agreements for certain geographical areas.
In 2018, the company purchased about 37% of its raw materials and distribution products from 20 different suppliers.
The five major suppliers account for about 16% of the company\'s total purchases.
The raw materials are mainly commodity products such as Laian, gypsum, crushed board and other wood products, aluminum, resin, fiberglass and covering, which are available by many suppliers.
Our customers won\'t last long.
Therefore, the company bears the risk of accurately predicting customer orders.
Its sales in a short period of time
If any unforeseen negative situation affects its main supplier, the duration may be negatively affected.
In addition, changes in demand in certain market sectors may cause cost fluctuations in some more commodities
Targeted raw materials and other products used and distributed.
The company continues to explore alternative sources of raw materials and components at home and abroadS.
All of its material purchases have alternative sources of supply.
The operations of regulatory and environmental quality companies are subject to environmental laws and regulations administered by federal, state and local regulators, including requirements related to air, water and noise pollution.
In addition, these requirements regulate the use, storage, discharge and disposal of hazardous chemicals used or produced by the company in a specific manufacturing process.
Selected products are subject to a variety of legally binding or voluntary standards.
For example, the composite wood substrate used by Patrick to produce products for customers on the RV market has been certified to comply with the applicable emission standards set by the California Air Resources Commission (“CARB”).
All suppliers and manufacturers of composite wood materials must comply with the current carbohydrate regulations.
The company is certified by the sales Forestry Management Committee (“FSC”)
Provide materials to customers of certain manufacturing branches.
FSC certification provides a link between responsible production and consumption of world forest materials and helps corporate customers make socially and environmental responsible purchasing decisions about the products they purchase.
The soft cushion products and mattresses provided by the company for RVs must comply with the Federal Motor Vehicle Safety Standards of the National Highway Traffic Safety Administration for flammable properties.
The company also produces and provides manufactured house products that must comply with the performance and construction regulations promulgated by the United StatesS.
Department of Housing and Urban Development (“HUD”).
The seasonal manufacturing business in the RV, marine and MH industries has historically been seasonal and is at the highest level in temperature and time.
As a result, the company\'s sales and profits were overall the highest in the second quarter and the lowest in the fourth quarter.
Seasonal industry trends over the past few years include the impact of increasing the open days for major RV manufacturers for dealers during August/September, resulting in dealers delaying certain purchases until new product lines are introduced at these shows.
In addition, due to the national and regional economic conditions and the impact of consumer confidence on the retail sales of RVs and other products sold by the company, current and future seasonal industry trends may be different components from previous years, time of dealer orders, fluctuations in dealer inventory, and the impact of bad weather conditions on industrial time from time to time
Wholesale wide shipment.
We have 2018 employees. We have 8,113 employees.
The company thinks it has a good relationship with its employees.
The company is not bound by collective bargaining agreements with its employees.
Our executives are listed in the table below as of 2018: Office position Todd M.
Chairman and chief executive of Cleveland
Jeffrey M.
Vice President Rodino executive
Sales and chief sales officer
Executive vice president-
Operations and Chief Operating Officer
President Obama-
Finance, finance director and secretary-
Courtney.
Vice President BlosserExecutive
HR and chief HR officer
Cleveland was appointed chairman of the board in May 2018 and Chief Executive Officer in February 2009. Mr.
Cleveland served as president of the company from May 2008 to December 2015 and as chief operating officer from May 2008 to March 2013.
Before that, sir.
After acquiring Adorn Holdings, Cleveland served as executive vice president and chief operating officer of operations and sales from August 2007 to May 2008
Patrick was in May 2007. Mr.
Cleveland has over 28 years of experience in manufacturing housing, leisure cars and industry in a variety of leadership capabilities. Andy L.
Nemet was appointed president of the company in January 2016.
Before that, sir.
Nemet served as executive vice president and chief financial officer of finance from May 2004 to December 2015 and served as Secretary
Finance supervisor from 2002 to 2015. Mr.
Nemeth has over 27 years of experience in manufacturing housing, leisure vehicles and industry in various financial and management capabilities. Jeffrey M.
Rodino was appointed chief sales officer of the company in September 2016.
Except for this role, Sir.
Rodino served as executive vice president of sales, which he has held since December 2011.
Prior to this, he served as the company\'s chief operating officer from March 2013 to September 2016 and vice president of sales in the Midwest from August 2009 to December 2011. Mr.
Rodino has more than 25 years of experience in serving recreational vehicles, artificial houses and the industrial market. Kip B.
Ellis was appointed executive vice president and chief operating officer of the company\'s operations in September 2016.
He was elected an officer in September 2016. Mr.
Ellis joined the company in April 2016 as vice president of market development.
Before he worked at Patrick.
Ellis served as vice president of after-sales marketing for the Dometic group from 2015 to 2016.
Before he took office in domitage,
Ellis served as vice president of global sales and marketing at Atwood Mobile Products from 2007 to 2015. Mr.
Ellis has more than 22 years of experience in the leisure, industrial and automotive markets. Joshua A.
Boone was appointed Vice President of Finance, Chief Financial Officer and Secretary
January 2016 financial director of the company.
He was elected an officer in May 2016. Mr.
Boone joined the company in July 2014 as the company\'s chief financial officer.
Before he worked at Patrick.
Brian served as chief financial officer of pretzels.
From 2012 to 2014, he held several leadership positions in finance and accounting at Brunswick, from 2007 to 2014. Courtney A.
In May 2016, Blosser was appointed executive vice president and chief human resources officer of the company.
Before that, sir.
From October 2009 to May 2016, Blosser served as vice president of human resources.
Before he worked at Patrick.
Blosser is a director of the company-
Whirlpool human resources from 2008 to 2009Mr.
Blosser has more than 30 years of experience in operations and human resources in various industries.
Website visit company report we provide free through our website www. patrickind.
Com, our Annual Report on Form 10
Quarterly Report on table 10
Q: Current Report of Form 8
K, and all amendments to these reports as soon as reasonably practicable after these materials are electronically submitted to or provided to SEC.
By-laws of our audit, compensation, corporate governance and nominating committees, our guidelines for corporate governance, our code of ethics and business conduct, our ethics for executives can also be obtained in the corporate governance section of our website.
Our website and the information contained or contained therein are not intended to be included in this annual report in Form 10. K. ITEM 1A.
In addition to the other information listed in this report, you should also carefully consider the following factors that may have a significant impact on our business, financial position or operational results.
The risks described below are not the only ones we face.
Other factors that we do not currently know or that we currently consider irrelevant may also have a significant adverse effect on our business, cash flow, financial position or operational results in the coming period.
Economic and business conditions beyond Patrick\'s control, including the cyclical and seasonal nature of the industry in which it sells its products, can lead to fluctuations and negative effects of operational results.
The RV, MH, marine and industrial markets we operate are affected by the cycle of growth and contraction of consumer demand and fluctuations in production levels, shipments, sales and operational results, affected by external factors such as general economic conditions, consumer confidence, employment rate, financing availability, interest rates, etc. , inflation, fuel prices and other economic conditions affecting consumer demand and discretionary spending.
In the past, the recession and recession have adversely affected our business and business results and have the potential to adversely affect our future results.
Therefore, the results of any previous period cannot indicate the results of any future period.
In addition, fluctuations in demand may adversely affect our inventory management, which may result in the inability to meet the needs of customers, or charge for outdated inventory.
Sales in the RV, marine, and MH industries have historically been seasonal, with sales typically at the highest levels during the day\'s temperature and time.
However, the seasonal industry trends in the past few years are different from those in previous years, mainly due to unstable economic conditions, fluctuations in inventory of RV dealers, changes in dealer display schedules, changes in interest rates, access to financing, fuel costs, and increased fluctuations in demand for RV dealers.
Therefore, the seasonal trend in the future may be different from that in previous years.
In addition, unusually bad weather conditions may affect the timing of industrial development.
Large shipments from one period to another resulted in unexpected fluctuations in our operating results.
If the financial situation of our customers and suppliers deteriorates, the results of our business and operations may be affected.
The market we serve is very sensitive to changes in the economic environment.
The weakness of economic conditions, or the lack of available financing in the credit market, may lead to deterioration in the financial situation of our customers and suppliers, this may have a negative impact on our business due to loss of sales or inability to fulfill our commitments.
Many of our customers are involved in the competitive market, so their financial situation may deteriorate.
In addition, the decline in the customer\'s financial position may hinder our ability to collect the customer\'s arrears.
Although we have a large number of customers, our sales are clearly concentrated on two customers, and any loss of one of them may have a significant adverse impact on our operating results and financial situation.
In 2018, two customers in the RV market accounted for 49% of our combined net sales.
The loss of any of these customers can have a significant adverse effect on our operational results and financial position.
Our time is not long.
Reaching a long-term agreement with customers cannot predict that we will maintain an existing relationship with these customers or that we will continue to supply these customers at the current level.
Changes in consumer preferences related to our products may adversely affect our sales level and operational results.
Changes in consumer preferences, or we cannot predict changes in consumer preferences in RVs or manufacturing houses, or products we produce may reduce the demand for our products, and adversely affect the results of our operations and the financial situation.
A large part of the company\'s sales are concentrated in the RV industry, and the decline in RV unit shipments or the decrease in industry growth may reduce the demand for our products, and adversely affect the results of our operations and the financial situation.
At 2018 and 2017, the company\'s net sales to the RV industry were 63% and 69% of combined net sales, respectively.
While the company measures sales in its RV segment by industry
According to a large number of wholesale transport statistics, the health of the RV industry depends on retail demand.
Historically, RVs retail sales have been closely linked to the overall economic situation and consumer confidence, which has been on the rise since 2010.
Domestic and Canadian retail unit shipments rose 4% in 2018, while RV wholesale unit shipments fell 4% after eight consecutive years of growth.
The future decline in RV unit shipment levels or the reduction in industry growth may significantly reduce the company\'s revenue in the RV industry and have a significant adverse impact on the results of its operations in 2019 and other future periods.
The RV, MH and marine industries are highly competitive and some of our competitors may have more resources than we do.
We operate in a competitive business environment and we are unable to maintain or increase changes in prices, geography or product portfolios that may have a negative impact on our sales, or the customer buys a competitor\'s product or produces in-
The house products we currently produce.
We not only compete with other suppliers of RV, MH and marine producers as well as the industrial market we serve, but also with suppliers of traditional venues
Builders and suppliers of cabinets and countertops.
Sales may also be affected by pricing, buying, financing, advertising, operations, promotions or other decisions made by buyers of our products.
In addition, we have no control over the vendor\'s decisions regarding our distribution and manufacturing of products, and therefore our ability to maintain distribution arrangements may be adversely affected.
Some of our competitors have greater financial resources or lower levels of debt or financial leverage, which may enable them to invest more capital based on changing market conditions.
Competitors may develop innovative new products that put the company at a competitive disadvantage.
If we are unable to compete successfully with RV, MH and marine industries and other manufacturers and suppliers in the industrial market we serve, we may lose our customers, sales may decline, or, we may not be able to increase or maintain profit margins on customer sales or continue to compete successfully in our core market.
Conditions in the credit market may limit the ability of consumers and wholesale customers to obtain RVs, retail and wholesale financing of manufactured goods and seafood, resulting in reduced demand for our products.
In the past, restrictions on consumer and wholesale financing of RVs, manufactured goods and seafood and the increase in this financing cost were limited and may again limit the ability of consumers and wholesale customers to purchase such products, this will lead to a reduction in production for our customers and, therefore, a reduction in demand for our products.
Loans for the purchase of artificial houses are usually shorter than on-site mortgages, with higher interest rates and more difficult to obtainbuilt homes.
Historically, lenders have demanded higher down payments, higher credit ratings and other criteria for these loans.
The current lending standards are more stringent than the historical standards, and potential buyers of many artificial houses may not be eligible.
The availability, cost and terms of these man-made housing loans also depend on economic conditions, lending practices of financial institutions, government policies and other factors, all of which are beyond our control.
The reduction in financing of manufactured goods and the increase in financing costs limit and may continue to limit the ability of consumers and wholesale customers to purchase manufactured goods, resulting in the reduction of production by our customers and therefore the reduction of demand for our products.
In addition, Dodd-
The Frank Act, which regulates financial transactions, may make some types of loans more difficult to obtain, including loans historically used to buy artificial homes.
The housing industry in manufacturing has experienced a long time.
The long-term decline in shipments has led to a decrease in demand for our products.
MH industry sales accounted for 12% of consolidated net sales in 2018, a significant decrease in new home production in the industry compared to the last production peak in 1998.
Part of the economic downturn is due to limited supply of man-made houses and high financing costs, exacerbated by economic and political conditions during the 2008 financial crisis.
Although the industry-
In recent years, large-scale wholesale production of manufactured goods has improved, and the deterioration of MH market conditions may have a significant adverse impact on our operational results.
Fuel shortages or high fuel prices may adversely affect our operations.
Products produced by RV and marine industries usually require gasoline or diesel to run, or use vehicles that require gasoline or diesel to run.
There is no guarantee that the supply of gasoline and diesel will continue to be uninterrupted, or that the price or tax on fuel will not increase significantly in the future.
Gasoline and diesel shortages, fuel prices have risen sharply, have had a significant adverse impact on our business and the entire RV industry in the past, and may have a significant adverse impact on our business in the future.
We rely on third.
Suppliers and manufacturers.
In general, our raw materials, supply and energy needs are obtained from a variety of sources and the quantity required.
While there are alternative sources, our business is at risk of rising prices and periodic delays in delivery.
Price fluctuations may be driven by the supply-demand relationship of the commodity, government regulation, tariffs or other cross-factors
Border taxes, economic conditions, religious festivals, natural disasters and other events in other countries.
In addition, if any of our suppliers seek bankruptcy relief or are unable to proceed as expected, the availability or price of these requirements may be adversely affected.
If we cannot effectively manage the challenges and risks associated with international business, our revenue and profitability may be affected.
We have purchased a large amount of raw materials and other supplies from suppliers in Indonesia, China, Malaysia and Canada.
Therefore, our ability to obtain raw materials and supplies in a favorable condition and in a timely manner is affected by various risks, including foreign exchange fluctuations, changes in the economic strength of foreign countries where we do business, difficulties in fulfilling contractual obligations and intellectual property rights, compliance burdens associated with a variety of international and USS.
Social, political and economic instability.
Due to health epidemics or outbreaks or other events, our business with international suppliers may be adversely affected by travel restrictions to and from any country where we do business.
Other risks associated with our foreign businesses include restrictive trade policies, tariffs imposed by foreign governments, taxes or government royalties, and compliance with the Foreign Corrupt Practices Act and local anti-corruption actbribery laws.
Any such proposal or measure may have a negative impact on our relationship with international suppliers and on US shipmentsS.
This can have a significant adverse impact on our business and operational results.
We maintain limited operations in Canada, the Netherlands and China, but are still at risk of operating in :(i)
The difficulties and costs of complying with various complex laws, treaties and regulations; (ii)
Unexpected changes in the political or regulatory environment; (iii)
Income and cash flow that may be subject to withholding tax requirements or imposed tariffs, foreign exchange controls or other restrictions; (iv)
Political, economic and social instability; (v)
Restrictions on import and export and other trade barriers; (vi)
To deal with the disruption of existing trade agreements or the escalation of trade tensions between states or political or economic alliances; (vii)
Maintain overseas subsidiaries and manage international business; and (viii)
Fluctuations in foreign exchange rates.
The increased cost and limited supply of certain raw materials may have a significant adverse impact on our business and operational results.
The prices of certain materials, including gypsum, Laian, crushed board, medium fiber board, aluminum and other commodity products, may fluctuate and change dramatically as supply and demand change.
Certain products are purchased from overseas and their supply depends on weather conditions, seasonal and religious festivals, political unrest, economic conditions overseas, customs duties or other cross-trades
Border taxes, natural disasters, shipping schedules for ships and port availability.
In addition, our commodity product suppliers sometimes operate in the case of capabilities or proximity capabilities, resulting in the possibility of some products being distributed.
We are generally able to maintain adequate material supply and pass on higher material costs to our customers in the form of surcharges and basic price increases when required.
However, without affecting demand, it is uncertain whether future price increases can be passed on to our customers or that limited supply of materials will not affect our production capacity.
Changes in these projects may have a negative impact on our sales level and operational results.
If we are unable to manage our inventory, the results of our operations may be significantly adversely affected.
Our customers don\'t usually last long.
Therefore, based on our forecast of future customer orders, we must take the risk of certain inventory commitments.
In order to meet the needs of these customers, we keep stock.
Changes in demand, market conditions and/or product specifications may lead to material passing and lack of alternative markets for certain of our customer-specific products and may have a negative impact on operational results.
We may incur expenses due to impairment of assets, including goodwill and other long-term
Live assets, as the fair value of these assets may decline, or the expected profitability of individual reporting units of the company or company may decline.
As of the 31st, about 2018 of our total assets were made up of goodwill, intangible assets and property, plant and equipment.
According to accepted accounting principles, each of these assets is subject to 14 periodic reviews and tests to determine whether the asset is recoverable or achievable.
Events or changes that may require us to test impairment of goodwill and intangible assets include changes in our estimated future cash flow, changes in the growth rate of our industry or any reporting unit, and the decline in our share price and market value.
In the future, if the sales demand or market situation is different from the management forecast, the asset management department will
Ups and downs may be required.
While significant impairment costs do not always affect current cash flows, they may have a significant impact on our operating results and our financial position.
The increase in demand for our products may make it more difficult for us to obtain additional skilled labor, which may adversely affect our operational efficiency.
In some geographical areas where we have production facilities, we have experienced a shortage of qualified employees, which has a negative impact on our cost of selling goods.
Labor shortages and continued competition for qualified employees may increase, especially in the improvement process of the economic era, our labor costs will increase and cause staff retention and recruitment challenges, because employees with knowledge and experience have the ability to change employers more easily.
If demand continues to increase, we may not be able to increase production in a timely manner to meet demand and may initially generate higher labor and production costs, which may adversely affect our financial position and operational results
We may incur significant costs or be adversely affected by the full or partial integration and/or closure of the manufacturing or distribution facility.
We regularly evaluate the cost structure of our operating facilities to distribute and/or manufacture products in the most efficient manner.
In the future, we may make capital investments to move, stop manufacturing and/or distribution capabilities, or products and product lines, sell or close all or part of the additional manufacturing and/or distribution facilities.
These changes may result in significant expenses or disruptions to our future operations, and we may not be able to get the expected benefits from these changes, which may adversely affect our operational results, cash flow and financial status.
We are subject to government and environmental regulations, and if we fail to comply, changes in laws and regulations or events beyond our control may result in damage, expenses or liability, or in general, will have a significant adverse impact on our financial situation and operational results.
Some of our manufacturing processes include the recycling or disposal of hazardous or toxic substances or wastes for use, treatment, storage and contracting.
Therefore, we must comply with the various government and environmental laws and regulations on these substances, as well as environmental requirements related to air, water and noise pollution.
The implementation of new laws and regulations or the modification of existing regulations may greatly increase the cost of the company\'s products.
We are currently unable to determine what legislation, if any, may be passed by federal, state or local governing bodies, or determine the impact of any such legislation on our customers or us.
Failure to comply with current or future regulations may result in fines or potential civil or criminal liability.
Both cases may have a negative impact on our operational results or on our financial position.
Failure to attract and retain qualified executive officers and key personnel can adversely affect our business.
While we use succession planning as part of the talent development and management process to help ensure continuity of the business model, the loss of any of our executives or other key personnel may reduce our ability to manage our business and strategic plans in the short term
It will lead to a decline in our sales and operational performance.
In addition, among other factors, our future success will depend on our ability to attract and retain executives, key employees and other qualified personnel.
Our ability to integrate the acquisition business may adversely affect operations.
As part of our business and strategic plan, we seek strategic acquisitions to provide shareholder value.
Any acquisition requires effective integration of existing operations and some of their administrative, financial, sales and marketing, manufacturing and other functions to maximize synergies.
The acquisition business involves some risks that may affect our financial performance, including increased leverage, transfer of management resources, debt liability for the acquisition business, and possible corporate culture conflicts.
If we are unable to successfully integrate these acquisitions, we may not be able to achieve the benefits found in the due diligence process, and our financial results may be negatively affected.
In addition, these acquisitions may generate significant unexpected liabilities.
Our debt levels may limit our operational flexibility and compromise our financial position and results.
We have $2018 as of £ 661.
1 million of total length
Regular debt, including debt currently due, does not include deferred financing costs and debt discounts for us under $900.
2018 credit financing and convertible senior notes (
Defined here).
Our level of liability may adversely affect our future operations, including making it more difficult for us to repay outstanding debts, in which case, we may not be able to find alternative sources of financing to replace our debt.
Our level of debt can be :(i)
Reduce the cash flow of funds we provide for working capital, capital expenditures, acquisitions and other general corporate purposes and limit our ability to obtain additional financing for those purposes; (ii)
Limiting our flexibility in planning or responding to changes in our business and operations industries and increasing our vulnerability; (iii)
Compared with competitors with less debt or less leverage, we are at a competitive disadvantage; and (iv)
There are concerns about the quality of our credit, which may result in a loss of the supplier\'s contract and/or the customer.
Our ability to meet our debt obligations will depend on our future operating performance, which may be affected by factors beyond our control.
Our 2018 credit agreement includes a variety of financial performance and other covenants.
If we do not comply with these covenants, our 2018 credit agreement may be terminated and the amount outstanding under these covenants may be due and payable immediately.
We have outstanding debt, both financial and non-financial.
The financial compact we have to comply with imposes restrictions on us.
There is no guarantee that we will continue to comply with the financial covenants under our 2018 credit agreement (
Defined below).
These covenants require us to comply with the highest level of combined total leverage and the lowest level of consolidated fixed fee coverage.
If we do not comply with the covenants contained in our 2018 credit agreement, the lender may cause our debt to expire before it expires or cause us to have to refinance the debt on adverse terms.
If our debt is accelerated, our assets may not be sufficient to repay our debt in full and there is no guarantee that we will be able to refinance any or all of these debts.
Due to industry conditions and our operating results, we have had limited access to funding sources in the past.
If we are unable to find the right source of funding when needed, we may not be able to maintain or expand our business.
We rely on our cash balance, operating cash flow and a credit line of 2018 to meet our operational needs, capital expenditures and other needs.
If there is a major recession, such as the recession that affected the economy in 2007,
2010, production of RVs and manufactured houses may decline, resulting in a decrease in demand for our products.
The decline in our operating performance may have a negative impact on our liquidity.
If our cash balance, operating cash flow and availability under the 2018 credit line are insufficient to fund our operations and there is no alternative capital, we may not be able to expand our business and make acquisitions, or we may need to limit our existing business.
16 under our 2018 credit agreement, we have letters of credit representing collateral for our casualty insurance plan and general operational purposes.
It is not possible to retain our current L/C, to obtain an alternative source of L/C, or to retain our 2018 credit agreement in support of these items, which may require us to mail cash collateral, reduce the amount of cash available for our business or cause us to limit or limit existing business.
If triggered, the conditional conversion function of our convertible notes issued on January 2018 may adversely affect our financial position and operational results.
If the conditional conversion function of convertible senior notes expires 2023 (
(Convertible notes)
If triggered, the holder of the convertible note will have the right to convert the convertible note at any time, at their choice, within the specified time.
If one or more holders choose to convert their convertible notes, unless we choose to fulfill our conversion obligations by delivering separate shares of our common stock (
Except to pay cash in lieu of the delivery of any part of the shares)
We will be required to pay off part or all of our conversion obligations by paying cash, which may adversely affect our liquidity.
In addition, even if the holder does not choose to convert their convertible notes, we may need to re-classify all or part of the outstanding principal of the convertible notes as the current principal, in accordance with the applicable accounting rules, not long term principalterm liability.
For more details, see notes 9 and 10 to consolidated financial statements.
Accounting methods for convertible debt securities that may be settled in cash, such as convertible notes, may have a significant impact on the financial results we report.
On May 2008, the Financial Accounting Standards Committee (the \"FASB\")
Job number of FASB StaffAPB 14-
1. Accounting of convertible debt instruments, settled in cash when Convertible (
Including Partial Cash Settlement)
Was later compiled as a compilation of accounting standards 470-
20, Debt with conversion and other options, what we call ASC 470-20. Under ASC 470-
20. An entity must separately state the liabilities and equity components of the convertible debt instrument (
Such as convertible notes)
At the time of conversion, it may be settled in cash, in whole or in part, in a manner that reflects the cost of the issuer\'s economic interests.
ASC 470 effect-
20 with respect to the accounting of convertible notes, it is required that the equity portion be included in the additional paid notes
In the capital portion of the shareholders\' equity on our consolidated balance sheet, in order to account for the debt portion of the convertible note, the value of the equity portion will be treated as the original issue discount.
Therefore, we will be asked to record more non-
The cash interest expense is higher than the interest expense in the current period, due to the amortization of the discounted book value of the convertible note to its face value within the period of the convertible note.
We will report a lower net income in the financial results as ASC 470-
20 interest will be required to include amortization of current debt discount and interest on notes coupon, which may adversely affect our reported or future financial results, the transaction price of our common stock and the transaction price of convertible notes.
In addition, in some cases convertible debt instruments (
Such as convertible notes)
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