Patrick Industries, Inc. Announces Private Offering of $400 Million of Senior Notes

Rhea-AI Summary

Patrick Industries (NASDAQ: PATK) has announced its intention to offer $400 million in Senior Notes due 2032 through a private placement. The company plans to use the proceeds to redeem $300 million of 7.500% Senior Notes due 2027, repay part of its existing credit facility, and cover related fees and expenses.

Concurrently, Patrick intends to amend its credit agreement, establishing a new $1.0 billion senior secured credit facility. This will consist of an $875 million revolving credit facility and a $125 million term loan, with maturity extended to October 2029. This new facility will replace the existing one due to mature in August 2027.

The offering is subject to market conditions, and the Notes have not been registered under the Securities Act. They will only be offered to qualified institutional buyers and non-U.S. persons outside the United States.

Positive

• Intention to offer $400 million in Senior Notes, potentially improving liquidity
• Plans to establish a new $1.0 billion senior secured credit facility
• Extension of credit facility maturity from August 2027 to October 2029

Negative

• Potential increase in long-term debt with the new $400 million Senior Notes offering
• Possible dilution of existing shareholders' value due to the new debt issuance

ELKHART, Ind., Oct. 7, 2024 /PRNewswire/ -- Patrick Industries, Inc. (NASDAQ: PATK) ("Patrick" or the "Company") today announced its intention to offer, subject to market conditions and other factors, $400 million aggregate principal amount of Senior Notes due 2032 (the "Notes") in a private placement exempt from registration under the Securities Act of 1933 ("Securities Act").

The interest rate, redemption prices and other terms of the Notes are to be determined upon pricing of the offering. Patrick intends to use the net proceeds from the offering to redeem all of its $300 million aggregate principal amount of 7.500% Senior Notes due 2027, repay a portion of its borrowings under its existing senior secured credit facility and pay fees and expenses in connection with the foregoing.

Concurrently with the completion of the offering, the Company plans to amend and restate the credit agreement governing its existing $925 million senior secured credit facility to establish a new $1.0 billion senior secured credit facility consisting of an $875 million revolving credit facility and a $125 million term loan. The maturity date for borrowings under the new senior secured credit facility is expected to be extended to October 2029. The new senior secured credit facility is expected to replace the Company's existing credit facility that is due to mature in August 2027, with pricing and other material provisions to be finalized following the completion of the pricing of the offering of the Notes described above.

This press release is neither an offer to sell nor a solicitation of an offer to buy the Notes, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

The Notes and related guarantees have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Any offers of the Notes will be made only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act. The Notes being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the applicable private offering memorandum.

About Patrick Industries, Inc.

Patrick (NASDAQ: PATK) is a leading component solutions provider serving the RV, Marine, Powersports and Housing markets. Since 1959, Patrick has empowered manufacturers and outdoor enthusiasts to achieve next-level recreation experiences. Our customer-focused approach brings together design, manufacturing, distribution, and transportation in a full solutions model that defines us as a trusted partner. Patrick is home to more than 85 leading brands, all united by a commitment to quality, customer service, and innovation. Headquartered in Elkhart, IN, Patrick employs approximately 10,000 skilled team members throughout the United States. For more information on Patrick, our brands, and products, please visit www.patrickind.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains certain statements within the meaning of Private Securities Litigation Reform Act of 1995 that are forward-looking in nature, including, without limitation, the completion, timing, terms and use of proceeds of the Notes offering and the proposed new senior secured credit facility. The forward-looking statements are based on current expectations and our actual results may differ materially from those projected in any forward-looking statement. There can be no assurance that any forward-looking statement will be realized or that actual results will not be significantly different from that set forth in such forward-looking statement. Factors that could cause actual results to differ materially from those in forward-looking statements included in this press release include, without limitation: the ability to complete the terms of the offering and to enter into a new senior secured credit facility on anticipated terms or at all; adverse economic and business conditions, including cyclicality and seasonality in the industries we sell our products; the financial condition of our customers or suppliers; the loss of a significant customer; changes in consumer preferences; declines in the level of unit shipments or reduction in growth in the markets we serve; the availability of retail and wholesale financing for RVs, watercraft and powersports products, and residential and manufactured homes; pricing pressures due to competition; costs and availability of raw materials, commodities and energy and transportation; supply chain issues, including financial problems of manufacturers or suppliers and shortages of adequate materials or manufacturing capacity; the challenges and risks associated with doing business internationally; challenges and risks associated with importing products, such as the imposition of duties, tariffs or trade restrictions; the ability to manage our working capital, including inventory and inventory obsolescence; the availability and costs of labor and production facilities and the impact of labor shortages; fuel shortages or high prices for fuel; any interruptions or disruptions in production at one of our key facilities; challenges with integrating acquired businesses; the impact of the consolidation and/or closure of all or part of a manufacturing or distribution facility; an impairment of assets, including goodwill and other long-lived assets; an inability to attract and retain qualified executive officers and key personnel; the effects of union organizing activities; the impact of governmental and environmental regulations, and our inability to comply with them; changes to federal, state, local or certain international tax regulations; unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, services, perceived environmental impacts, or otherwise; public health emergencies or pandemics, such as the COVID-19 pandemic; our level of indebtedness; our inability to comply with the covenants contained in the existing senior secured credit facility or the new senior secured credit facility; an inability to access capital when needed; the settlement or conversion of our notes; fluctuations in the market price for our common stock; an inability of our information technology systems to perform adequately; any disruptions in our business due to an IT failure, a cyber-incident or a data breach; any adverse results from our evaluation of our internal controls over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002; certain provisions in our Articles of Incorporation and Amended and Restated By-laws that may delay, defer or prevent a change in control; adverse conditions in the insurance markets; and the impact on our business resulting from wars and military conflicts, such as war in Ukraine and evolving conflict in the Middle East.

There can be no assurance that any forward-looking statement will be realized or that actual results will not be significantly different from that set forth in such forward-looking statement. The Company does not undertake to publicly update or revise any forward-looking statements. Information about certain risks that could affect our business and cause actual results to differ from those express or implied in the forward-looking statements are contained in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and in the Company's Forms 10-Q for subsequent quarterly periods, which are filed with the Securities and Exchange Commission ("SEC") and are available on the SEC's website at www.sec.gov. Each forward-looking statement speaks only as of the date of this press release, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date on which it is made. Prospective purchasers are cautioned not to place undue reliance on these forward-looking statements.

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SOURCE Patrick Industries, Inc.

FAQ

What is the purpose of Patrick Industries' (PATK) $400 million Senior Notes offering?

Patrick Industries (PATK) intends to use the proceeds from the $400 million Senior Notes offering to redeem $300 million of existing 7.500% Senior Notes due 2027, repay part of its current credit facility, and cover related fees and expenses.

What changes is Patrick Industries (PATK) making to its credit facility in October 2024?

Patrick Industries (PATK) plans to establish a new $1.0 billion senior secured credit facility, consisting of an $875 million revolving credit facility and a $125 million term loan. This will replace the existing facility and extend the maturity date to October 2029.

When will Patrick Industries' (PATK) new Senior Notes mature?

The new Senior Notes that Patrick Industries (PATK) intends to offer will be due in 2032.

Who is eligible to purchase Patrick Industries' (PATK) new Senior Notes?

Patrick Industries' (PATK) new Senior Notes will only be offered to qualified institutional buyers under Rule 144A of the Securities Act and to non-U.S. persons outside the United States in compliance with Regulation S.