ELKHART, Ind., April 27, 2017 /PRNewswire/ -- Patrick
Industries, Inc. (NASDAQ: PATK), a major manufacturer and
distributor of building and component products for the recreational
vehicle ("RV"), manufactured housing ("MH") and industrial markets,
today reported its financial results for the first quarter ended
March 26, 2017.
First Quarter 2017 Financial Results
Net sales for the first quarter of 2017 increased $66.8 million or 24%, to $345.4 million from $278.6
million in the same quarter of 2016. The increase was
primarily attributable to a 21% increase in the Company's revenue
from the RV industry, which primarily reflected the incremental
contribution from acquisitions completed in 2016 and industry
growth. According to industry sources, RV industry wholesale
unit shipments increased approximately 12% in the first quarter of
2017 compared to the prior year. Sales to the RV industry
represented 76% of the Company's first quarter 2017 sales.
Revenue from the MH industry, which represented 13% of the
Company's first quarter 2017 sales, increased 36%. The
Company estimates that wholesale unit shipments in the MH industry
rose approximately 20% from the first quarter of 2016.
Additionally, sales to the industrial markets increased 35%
compared to the prior year period. The industrial market
sector, which is tied primarily to residential housing and
non-residential construction spending, accounted for 11% of the
Company's first quarter 2017 sales. According to industry
sources, new housing starts in the first quarter of 2017 increased
approximately 8% compared to the prior year. The Company
estimates that approximately 54% of its industrial market sales are
linked to the residential housing sector and its sales to the
industrial markets generally lag new housing starts by
approximately six to nine months.
The Company's RV content per unit (on a trailing twelve-month
basis) for the first quarter of 2017 increased approximately 14% to
$2,167 from $1,904 for the first quarter of 2016. The MH
content per unit (on a trailing twelve-month basis) for the first
quarter of 2017 increased approximately 14% to an estimated
$2,044 from $1,787 for the first quarter of 2016.
For the first quarter of 2017, Patrick reported operating income
of $23.9 million, an increase of 16%
or $3.3 million, from the
$20.6 million reported in the first
quarter of 2016. Net income in the first quarter of 2017
increased 35% to $17.5 million from
$13.0 million in the first quarter of
2016, while net income per diluted share increased 32% to
$1.12 from $0.85.
In the fourth quarter of 2016, the Company adopted a new
accounting standard related to employee share-based payments that
requires tax benefits resulting from the vesting or exercise of
such payments be recognized in the Company's income tax provision
rather than in additional paid-in capital. Adoption of the new
standard required a retroactive adjustment to the Company's income
tax provision previously reported for the first quarter of
2016. As a result of this adjustment, the Company's first
quarter 2016 net income and net income per diluted share were
increased by $0.9 million and
$0.05 per share,
respectively. In addition, adoption of this standard increased
the Company's first quarter 2017 net income and net income per
diluted share by $3.7 million and
$0.22 per share, respectively.
Todd Cleveland, President and
Chief Executive Officer, said, "We are pleased with our first
quarter revenue performance and profitability, which are a result
of the continued execution of our strategic and operational
initiatives and reflect a strong start to the year in the markets
we serve. Manufacturer and dealer sentiment remains positive as we
head into the second quarter and the height of the selling season
in anticipation of strong retail traffic on dealer lots and
expected continued year-over-year growth. Additionally, the
MH industry continues to gain strength along with optimism in the
residential housing markets, and both our MH and industrial
businesses are outperforming their respective markets."
"Based on the most recently available data, RV retail sales of
towable and motorized units, on a combined basis, grew 10% in the
first two months of 2017 matching up well with recent historical
seasonal trends and demand patterns," stated Andy Nemeth, President. "We continue to see
strong demand in this market, supported by favorable demographic
trends and consumer confidence and the continued popularity of the
RV and recreational lifestyle, and we remain committed to
focusing on positioning ourselves to be able to fully support our
customer base with investments in new products and increased
capacity. Additionally, we increased our overall content per
unit in both the RV and MH industries and remain optimistic about
the long-term growth potential in these industries as well as in
the industrial and adjacent markets."
The Company invested approximately $14
million, in the aggregate, for acquisitions and capital
expenditures in the first quarter of 2017. As previously
announced, on March 14, 2017, the
Company completed a public offering of 1,350,000 shares of its
common stock at a price of $73.00 per
share. The net proceeds of the offering were used to
immediately pay down a portion of the Company's outstanding
indebtedness. Total debt, net of cash on hand, decreased
$65.1 million to $201.0 million at March
26, 2017 from $266.1 million
at December 31, 2016. As
previously announced, in the first quarter of 2017, the Company
entered into a third amendment to its credit agreement to expand
its credit facility to $450 million
from $360 million and extend its
maturity to March 2022.
"The capital capacity and flexibility provided by both the
equity offering and the expansion of the credit facility position
us with the dry powder to execute on our long-term strategic growth
initiatives and capital allocation strategy as currently planned,"
Mr. Nemeth stated. "We very quickly put some of this capital
to use with our most recent acquisition of Medallion Plastics, Inc.
in late March 2017, which added
additional high quality product lines and team members to our
stable allowing us to bring additional value to our customers and
increase our RV content per unit. In addition, we continue to
pursue other opportunities to leverage our resources and further
drive the business model including acquisitions, expansions, and
capital expenditures."
Patrick's total assets increased $67.7
million to $602.7 million at
March 26, 2017 from $535.0 million at December
31, 2016, primarily reflecting seasonality, overall growth,
and the addition of acquisition-related assets.
"In anticipation of continued growth in all three of our end
markets, we continue to be optimistic about the opportunities to
strategically grow our business and execute on our capital
allocation strategy, gain market share, expand operations in
targeted regional territories, and drive shareholder value, " Mr.
Cleveland further stated. "We have made investments in
leadership talent, engagement and retention, capital equipment and
facilities that are focused on strategically and structurally
positioning ourselves with the foundation for the next phase of the
Company's growth model. As we look toward the rest of the year, we
expect to continue to put capital to use and make targeted capital
investments to support our new business initiatives and maintain
our balanced approach to leveraging our operating platform with the
goal of broadening our sales and innovation efforts, introducing
new products and product line extensions, and executing on our
organic and acquisition-related objectives."
Conference Call Webcast
As previously announced, Patrick Industries will host an online
webcast of its first quarter 2017 earnings conference call that can
be accessed on the Company's website, www.patrickind.com, under
"Investor Relations," on Thursday, April 27,
2017 at 10:00 a.m. Eastern
time.
Patrick Industries, Inc.
Patrick Industries, Inc. is a major manufacturer of component
products and distributor of building products serving the
recreational vehicle, manufactured housing, kitchen cabinet, office
and household furniture, fixtures and commercial furnishings,
marine, and other industrial markets and operates coast-to-coast
through locations in 16 states. Patrick's major manufactured
products include decorative vinyl and paper laminated panels,
countertops, fabricated aluminum products, wrapped profile
mouldings, slide-out trim and fascia, cabinet doors and components,
hardwood furniture, fiberglass bath fixtures, fiberglass and
plastic component products, electrical systems components,
softwoods lumber, interior passage doors, RV painting, and slotwall
panels and components. The Company also distributes drywall and
drywall finishing products, electronics and audio systems
components, wiring, electrical and plumbing products, cement
siding, raw and processed lumber, FRP products, interior passage
doors, roofing products, laminate and ceramic flooring, shower
doors, furniture, fireplaces and surrounds, interior and exterior
lighting products, and other miscellaneous products.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains certain statements related to future
results, our intentions, beliefs and expectations or predictions
for the future, which are forward-looking statements as that term
is defined in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially
from either historical or anticipated results depending on a
variety of factors. Potential factors that could impact results
include: the impact of any economic downturns especially in the
residential housing market, a decline in consumer confidence
levels, pricing pressures due to competition, costs and
availability of raw materials, the imposition of restrictions and
taxes on imports of raw materials and components used in our
products, information technology performance and security, the
availability of commercial credit, the availability of retail and
wholesale financing for residential and manufactured homes, the
availability and costs of labor, inventory levels of retailers and
manufacturers, the financial condition of our customers, retention
and concentration of significant customers, the ability to generate
cash flow or obtain financing to fund growth, future growth rates
in the Company's core businesses, the seasonality and cyclicality
in the industries to which our products are sold, realization and
impact of efficiency improvements and cost reductions, the
successful integration of acquisitions and other growth
initiatives, increases in interest rates and oil and gasoline
prices, adverse weather conditions impacting retail sales, our
ability to remain in compliance with our credit agreement
covenants, and general economic, market and political conditions.
In addition, national and regional economic conditions may affect
the retail sale of recreational vehicles and residential and
manufactured housing. The Company does not undertake to update
forward-looking statements, except as required by law. Further
information regarding these and other risks, uncertainties and
factors is contained in the section entitled "Risk Factors" in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2016, and in the
Company's Form 10-Qs 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.
PATRICK
INDUSTRIES, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
|
|
|
|
|
|
|
|
|
|
First Quarter
Ended
|
(thousands except per
share data)
|
Mar. 26,
2017
|
|
Mar. 27,
2016
|
|
|
|
|
NET
SALES
|
$
|
345,427
|
|
|
$
|
278,637
|
|
Cost of goods
sold
|
287,878
|
|
|
233,285
|
|
GROSS PROFIT
|
57,549
|
|
|
45,352
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
Warehouse and
delivery
|
10,343
|
|
|
7,699
|
|
Selling, general and
administrative
|
19,106
|
|
|
14,271
|
|
Amortization of intangible
assets
|
4,185
|
|
|
2,768
|
|
Total operating expenses
|
33,634
|
|
|
24,738
|
|
|
|
|
|
OPERATING
INCOME
|
23,915
|
|
|
20,614
|
|
Interest expense,
net
|
2,014
|
|
|
1,649
|
|
Income
before income taxes
|
21,901
|
|
|
18,965
|
|
Income taxes
|
4,434
|
|
|
5,990
|
|
NET
INCOME
|
$
|
17,467
|
|
|
$
|
12,975
|
|
|
|
|
|
BASIC NET INCOME
PER COMMON SHARE
|
$
|
1.15
|
|
|
$
|
0.87
|
|
DILUTED NET INCOME
PER COMMON SHARE
|
$
|
1.12
|
|
|
$
|
0.85
|
|
|
|
|
|
Weighted average
shares outstanding - Basic
|
15,238
|
|
|
14,948
|
|
Weighted average
shares outstanding - Diluted
|
15,549
|
|
|
15,192
|
|
PATRICK
INDUSTRIES, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
|
|
|
|
|
|
|
|
|
|
As of
|
(thousands)
|
Mar. 26,
2017
|
|
Dec. 31,
2016
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
10,919
|
|
|
$
|
6,449
|
|
Trade receivables,
net
|
93,759
|
|
|
38,455
|
|
Inventories
|
127,861
|
|
|
120,019
|
|
Prepaid expenses and
other
|
4,646
|
|
|
7,846
|
|
Total current assets
|
237,185
|
|
|
172,769
|
|
Property, plant
and equipment, net
|
88,095
|
|
|
85,483
|
|
Goodwill and
other intangible assets, net
|
274,368
|
|
|
274,432
|
|
Deferred
financing costs, net
|
2,556
|
|
|
1,728
|
|
Other
non-current assets
|
522
|
|
|
538
|
|
TOTAL ASSETS
|
$
|
602,726
|
|
|
$
|
534,950
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Current maturities of
long-term debt
|
$
|
15,766
|
|
|
$
|
15,766
|
|
Accounts payable
|
63,064
|
|
|
46,752
|
|
Accrued
liabilities
|
24,560
|
|
|
23,575
|
|
Total current liabilities
|
103,390
|
|
|
86,093
|
|
Long-term debt,
less current maturities, net
|
196,172
|
|
|
256,811
|
|
Deferred tax
liabilities, net
|
5,892
|
|
|
4,988
|
|
Deferred
compensation and other
|
1,610
|
|
|
1,610
|
|
TOTAL LIABILITIES
|
307,064
|
|
|
349,502
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
Common
stock
|
156,463
|
|
|
63,716
|
|
Additional
paid-in-capital
|
8,243
|
|
|
8,243
|
|
Accumulated
other comprehensive income
|
27
|
|
|
27
|
|
Retained
earnings
|
130,929
|
|
|
113,462
|
|
TOTAL SHAREHOLDERS' EQUITY
|
295,662
|
|
|
185,448
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
602,726
|
|
|
$
|
534,950
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/patrick-industries-inc-reports-first-quarter-2017-financial-results-300447119.html
SOURCE Patrick Industries, Inc.