Patrick Industries, Inc.

Good morning, ladies and gentlemen, and welcome to Patrick Industry's second quarter 2021 earnings conference call. My name is Daryl, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. And I will now turn the call over to Ms. Julianne Katowski from Investor Relations. Ms. Katowski, you may begin.

Good morning, everyone, and welcome to our call this morning. I am joined on the call today by Andy Nemeth, CEO, Jeff Rodino, President, and Jake Pekovic, CFO. Certain statements made in today's conference call regarding Patrick Industries and its operations may be considered forward-looking statements under the securities laws. There are a number of factors, many of which are beyond the company's control, which could cause the actual results and events to differ materially from those described in the forward-looking statements. These factors are identified in our press releases, our Form 10-K for the year ended 2020, and in our other filings with the Securities and Exchange Commission. We undertake no obligation to update these statements to reflect circumstances or events that occur after the date the forward-looking statements are made. I would now like to turn the call over to Andy Nemitz.

Thank you, Julianne. Good morning, ladies and gentlemen, and thank you for joining us on the call today. I would especially like to welcome Jeff Rodino, who in his new role as president continues his legacy of leadership and deep knowledge of our business and end markets. We're absolutely thrilled that Jeff has taken on this new role, offering his phenomenal experience and insight into our products, customers, and people, and I am very excited to continue to work with him as he brings his energy, wisdom, and vision to our businesses and team. Our second quarter of 2021 reflects continued quarter-over-quarter and sequential strong top-line growth and profitability, as well as the exciting expansion of our footprint and capabilities in the leisure lifestyle markets. This has been the trend over the last three quarters as we emerge from the uncertainty of COVID. It has become clear that outdoor recreation and housing needs will be front and center in the way family and friends spend quality time together. Additionally, as consumers continue to invest in the security of homeownership, the functionality and value of home improvement remains strong. A year has passed since we felt the full early-stage impact of COVID in the second quarter of 2020, but we diligently exercised the flexibility of our business model, reinforcing our resilience. We were able to drive profitability despite a six-week shutdown of our plants in line with the OEMs and paused on our CapEx and acquisition initiatives. Emerging from the second quarter of 2020, we quickly shifted gears from defensive to offensive, immediately began reinvesting in our business to supply the explosive growth in not only leisure lifestyle but housing as well fast forward to q2 2021 and we are operating in a very dynamic and exciting marketplace fueled by the incredible and growing horsepower of what now approximates more than 10 000 team members who are providing rv marine mh and industrial solutions to our customers supply chain volatility and initiatives in the quarter required our teams to remain flexible get creative collaborate and work together between brands, and reach out to our deep network of partners to secure essential materials needed to deliver on growth in our primary end markets. We have continued to partner with the OEMs and builders in all of our markets as well, as they have demonstrated tremendous flexibility in adapting their business model and build schedules to match up with the supply chain constraints and opportunities. The leisure lifestyle markets represented 74% of our revenue in the quarter, and consumer demand has remained strong throughout the spring and summer, The evidence is everywhere, with national parks seeing record visits and marinas continuing to be at full capacity as the adventure continues for friends and family to share experiences while being right at the center of nature and the outdoors with the luxury of having home-based amenities. In our housing and industrial markets, which together represent approximately 26% of second quarter revenues, housing, repair and remodel, and home improvement demand remain a consistent trend as a very tight housing market is supporting homeownership and investment in home improvement. These trends in consumer preferences and activities all provide continued support for our primary end markets and our long-term outlook. Operationally, the growing magnitude of our footprint and the agility of our position in our markets translated into strategic gains in the quarter, as we continued leveraging our fixed cost structure and automation efficiencies, as well as driving continuous improvement initiatives, which further propelled profitability. The incredible talent, dedication, commitment, and knowledge base of our team members and business unit leaders amplified our efforts, in addition to our internal sourcing synergies, purchasing power, and supply chain relationships, resulting in a difficult but successful navigation of the current supply chain environment. Our team members are continuing to demonstrate their passion for our products and customers, as evidenced by their can-do attitudes, tremendous resilience, and willingness and desire to go the extra mile to match up with customer production schedules. Capital deployment and strategic investment in our infrastructure continues to drive our business in alignment with our disciplined capital allocation strategy. CapEx and software initiatives are and have been focused on automation and capacity expansion to continue to provide our differentiated solutions to our customers' dynamic demand patterns. We've also reinvested in the business to leverage our foundation to proactively take advantage of the strategic opportunities in front of us. We've added talent and resources to support our ESG initiative which continue to be a high priority as we apply our company's vision and ambition to our sustainability journey. Innovative material use minimization and optimization programs continue across our business operations to reduce waste, reuse materials, and recycle. Human capital management programs, including leadership development, training, continuing education, and cultural alignment, develop our people and enhance their well-being at work and at home to help foster and retain both our legacy and new talent. As we have discussed, it is unquestionably the talent and mindsets of our people that provide the solutions and creative energy for our customers. Our second quarter operating performance exhibited particularly strong year-over-year and sequential quarter-over-quarter growth, given the comparison to the Q2 2020 backdrop of COVID-related production shutdowns. In comparison to Q2 2020, we saw triple-digit growth in our RV and marine end markets and high double-digit growth in our MH and industrial end markets. Market strength, our team's operating model, and the leveraging of our fixed cost structure translated into improved gross and operating profit margins, operating income, net income, and diluted earnings per share during the quarter. Our second quarter revenues of over $1 billion increased 141%, or $596 million, compared to the second quarter of 2020, and we earned $2.52 per diluted share. I'll now turn the call over to Jeff Rodino, who will provide further details into our end markets.