ELKHART, Ind., July 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"), marine and industrial
markets, today reported its financial results for the second
quarter and six months ended June 25,
2017.
Second Quarter 2017 Financial Results
Net sales for the second quarter of 2017 increased $92.0 million or 29%, to $407.2 million from $315.2
million in the same quarter of 2016. The increase was
attributable to industry growth, acquisitions, geographic expansion
efforts, and market share gains. The Company's revenues from
the RV industry, which represented 69% of second quarter 2017
sales, increased 23%. According to industry sources, RV industry
wholesale unit shipments increased approximately 15% in the second
quarter of 2017 compared to the prior year. Revenues from the
MH industry, which represented 13% of second quarter 2017 sales,
increased 30% compared to the prior year period. The Company
estimates that wholesale unit shipments in the MH industry rose
approximately 11% from the second quarter of 2016. Revenues
from the industrial market, which is tied primarily to residential
housing and non-residential construction spending, increased
18%. The industrial market, which accounted for 11% of the
Company's second quarter 2017 sales, saw new housing starts
increase approximately 1% in the quarter. The Company has
continued to expand its presence in the adjacent marine market
through strategic acquisitions, particularly over the last two
years. Sales from the marine industry, which were previously
included with the Company's revenues from the RV industry,
represented 7% of the Company's second quarter 2017
sales.
For the second quarter of 2017, Patrick reported operating
income of $33.7 million, an increase
of 20% or $5.7 million, from the
$28.0 million reported in the second
quarter of 2016. Net income in the second quarter of 2017
increased 25% to $21.3 million from
$17.0 million in the second quarter
of 2016, and net income per diluted share increased 15% to
$1.28 from $1.11.
The Company's adoption of the new accounting standard for
employee share-based payments in the fourth quarter of 2016
required a retroactive adjustment to the income tax provision
previously reported for the second quarter of 2016. As a
result of this adjustment, the Company's second quarter 2016 net
income and net income per diluted share were increased by
$0.3 million and $0.01, respectively. In addition, adoption
of this standard increased the Company's second quarter 2017 net
income and net income per diluted share by $0.9 million and $0.05, respectively. Second quarter 2017 net
income per diluted share also reflects the increase in weighted
average shares outstanding from the common stock offering completed
in March 2017.
Todd Cleveland, Chief Executive
Officer, said, "We are pleased with our overall operating and
financial results in the second quarter. Our performance
reflects the continued successful execution of our strategic growth
plans, coupled with the continued positive momentum in the
industries we serve. Our innovative solutions, design
capabilities, expansion efforts, and the acquisition of Leisure
Product Enterprises in April 2017
have afforded us the opportunity to continue to increase our
product offerings in all of our primary markets, and to further
expand our presence as a key component supplier to the marine
industry."
"Our results are consistent with the continued strong demand in
all of our markets," stated Andy
Nemeth, President. "RV retail unit shipments through
the first five months of 2017 experienced double-digit growth with
the continued trend toward more modest travel trailers and
motorhomes, as these categories are continuing to lead both retail
and wholesale unit growth. In addition, wholesale unit
shipment growth in the MH industry is outpacing new housing starts
growth, and the marine powerboat retail market is experiencing
gains over the prior year with unit sales up an estimated 3% in the
first six months of 2017, indicating continued positive momentum in
the overall leisure lifestyle."
Six Months 2017 Financial Results
Net sales for the first six months of 2017 increased
$158.8 million or 27%, to
$752.6 million from $593.8 million in the same period of
2016. For the first six months of 2017, the Company's
revenues from the RV industry, which represented 70% of its six
months 2017 sales, increased 20%. According to industry
sources, RV industry wholesale unit shipments increased
approximately 13% in the first six months of 2017 compared to the
prior year. Additionally, revenues from the MH industry,
which represented 13% of the Company's six months 2017 sales, rose
32% compared to the prior year as wholesale unit shipments in this
industry, as estimated by the Company, increased approximately
17%. Revenues from the industrial market increased 25% and
benefited primarily from acquisitions and from market share gains,
particularly related to the residential housing market. The
industrial market, which accounted for 12% of the Company's six
months 2017 sales, saw new housing starts increase by approximately
4% for the first six months of 2017 compared to the prior
year. The Company's sales from the marine industry
represented 5% of its six months 2017 sales.
The Company's RV content per unit (on a trailing twelve-month
basis excluding revenues from the marine market which were
previously included with RV revenues) for the second quarter of
2017 increased approximately 9% to $2,103 from $1,930
for the second quarter of 2016. The MH content per unit (on a
trailing twelve-month basis) for the second quarter of 2017
increased approximately 16% to an estimated $2,115 from $1,827
for the second quarter of 2016.
For the first six months of 2017, Patrick reported operating
income of $57.6 million, an increase
of $9.0 million or 19%, from the
$48.6 million reported in the first
six months of 2016. Net income in the first six months of
2017 increased 29% to $38.7 million
from $29.9 million in the first six
months of 2016, while net income per diluted share increased 22% to
$2.40 from $1.97.
The Company's six months 2016 net income and net income per
diluted share were retroactively increased by $1.2 million and $0.07, respectively, from the amounts previously
reported, as a result of the adoption of the employee share-based
payment accounting standard. For the comparable 2017 period,
net income and net income per diluted share were increased by
$4.6 million and $0.27, respectively. Six months 2017 net
income per diluted share also reflects the increase in weighted
average shares outstanding from the previously mentioned common
stock offering.
The Company invested approximately $92.4
million, in the aggregate, for acquisitions and capital
expenditures in the first six months of 2017. Total debt, net
of cash on hand, decreased $17.5
million to $248.6 million at
June 25, 2017, from $266.1 million at December
31, 2016, reflecting the net proceeds of approximately
$93.6 million from the Company's
common stock offering in March of 2017, cash flows from operations,
and the investments in acquisitions and capital expenditures.
Patrick's total assets increased $154.3
million to $689.3 million at
June 25, 2017, from $535.0 million at December
31, 2016, primarily reflecting the addition of
acquisition-related assets, seasonality, and overall growth.
"We are pleased with our first half 2017 financial and operating
performance," Mr. Nemeth further stated. "We will continue to
make investments in our workforce and in capacity initiatives
consistent with our capital allocation strategy in order to both
add scale in alignment with our customers' demand patterns and to
grow our businesses and brands as we continue to strive to meet and
exceed our customers' expectations. In addition, we look
forward to strengthening our position and increasing our product
offerings for our customers as we further expand our presence into
the marine and other primary markets, and our expansion initiatives
are taking hold and delivering results in line with our strategic
plan."
"As we look ahead to the second half of 2017, and the expected
continued growth in all four of our primary end markets, we are
focused on continuing to drive strong growth on both the top and
bottom line, make strategic acquisitions in our existing businesses
and similar markets, reinvest in our business through capital
expenditures and workforce planning, and maximize efficiencies to
support our long-term strategic growth initiatives," Mr. Cleveland
stated. "The capital capacity and flexibility provided by our
recent equity offering and credit facility expansion provide us
with a strong financial foundation and, when combined with the
exceptional commitment and dedication of our 6,000+ team members,
position us to focus on the execution of our strategic plan and to
further drive shareholder value."
Conference Call Webcast
As previously announced, Patrick Industries will host an online
webcast of its second quarter 2017 earnings conference call that
can be accessed on the Company's website, www.patrickind.com, under
"Investor Relations," on Thursday, July 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, marine, kitchen
cabinet, office and household furniture, fixtures and commercial
furnishings, and other industrial markets and operates
coast-to-coast through locations in 19 states. Patrick's major
manufactured products include decorative vinyl and paper laminated
panels, countertops, fabricated aluminum products, wrapped profile
moldings, slide-out trim and fascia, cabinet doors and components,
hardwood furniture, fiberglass bath fixtures, thermoformed shower
surrounds, fiberglass and plastic helm systems and component
products, wiring and wire harnesses, electrical systems components
including instrument and dash panels, softwoods lumber, interior
passage doors, RV painting, slotwall panels and components,
aluminum fuel tanks, and CNC molds and composite parts and other
products. 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
Ended
|
|
Six Months
Ended
|
(thousands except per
share data)
|
Jun. 25,
2017
|
|
Jun. 26,
2016
|
|
Jun. 25,
2017
|
|
Jun. 26,
2016
|
|
|
|
|
|
|
|
|
NET
SALES
|
$
|
407,145
|
|
$
|
315,163
|
|
$
|
752,572
|
|
$
|
593,800
|
Cost of goods
sold
|
335,645
|
|
259,879
|
|
623,523
|
|
493,164
|
GROSS PROFIT
|
71,500
|
|
55,284
|
|
129,049
|
|
100,636
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Warehouse and
delivery
|
11,083
|
|
9,285
|
|
21,426
|
|
16,984
|
Selling, general and
administrative
|
21,893
|
|
14,767
|
|
40,999
|
|
29,038
|
Amortization of intangible
assets
|
4,817
|
|
3,225
|
|
9,002
|
|
5,993
|
Total operating expenses
|
37,793
|
|
27,277
|
|
71,427
|
|
52,015
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
33,707
|
|
28,007
|
|
57,622
|
|
48,621
|
Interest expense,
net
|
2,010
|
|
1,632
|
|
4,024
|
|
3,281
|
Income
before income taxes
|
31,697
|
|
26,375
|
|
53,598
|
|
45,340
|
Income taxes
|
10,437
|
|
9,406
|
|
14,871
|
|
15,396
|
NET
INCOME
|
$
|
21,260
|
|
$
|
16,969
|
|
$
|
38,727
|
|
$
|
29,944
|
|
|
|
|
|
|
|
|
BASIC NET INCOME
PER COMMON SHARE
|
$
|
1.30
|
|
$
|
1.13
|
|
$
|
2.45
|
|
$
|
2.00
|
DILUTED NET INCOME
PER COMMON SHARE
|
$
|
1.28
|
|
$
|
1.11
|
|
$
|
2.40
|
|
$
|
1.97
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding - Basic
|
16,400
|
|
15,008
|
|
15,839
|
|
14,978
|
Weighted average
shares outstanding - Diluted
|
16,660
|
|
15,231
|
|
16,123
|
|
15,212
|
PATRICK
INDUSTRIES, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
|
|
|
|
|
|
|
|
|
|
As of
|
(thousands)
|
Jun. 25,
2017
|
|
Dec. 31,
2016
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
11,606
|
|
$
|
6,449
|
Trade receivables,
net
|
99,337
|
|
38,455
|
Inventories
|
133,781
|
|
120,019
|
Prepaid expenses and
other
|
6,468
|
|
7,846
|
Total current assets
|
251,192
|
|
172,769
|
Property, plant
and equipment, net
|
94,830
|
|
85,483
|
Goodwill and
other intangible assets, net
|
340,363
|
|
274,432
|
Deferred
financing costs, net
|
2,440
|
|
1,728
|
Other
non-current assets
|
506
|
|
538
|
TOTAL ASSETS
|
$
|
689,331
|
|
$
|
534,950
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Current maturities of
long-term debt
|
$
|
15,766
|
|
$
|
15,766
|
Accounts payable
|
66,525
|
|
46,752
|
Accrued
liabilities
|
26,882
|
|
23,575
|
Total current liabilities
|
109,173
|
|
86,093
|
Long-term debt,
less current maturities, net
|
244,409
|
|
256,811
|
Deferred tax
liabilities, net
|
13,933
|
|
4,988
|
Deferred
compensation and other
|
1,595
|
|
1,610
|
TOTAL LIABILITIES
|
369,110
|
|
349,502
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
Common
stock
|
159,762
|
|
63,716
|
Additional
paid-in-capital
|
8,243
|
|
8,243
|
Accumulated
other comprehensive income
|
27
|
|
27
|
Retained
earnings
|
152,189
|
|
113,462
|
TOTAL SHAREHOLDERS' EQUITY
|
320,221
|
|
185,448
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
689,331
|
|
$
|
534,950
|
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SOURCE Patrick Industries, Inc.