ELKHART, Ind., Feb. 15, 2018 /PRNewswire/ -- Patrick
Industries, Inc. (NASDAQ: PATK), a major manufacturer and
distributor of component and building products for the recreational
vehicle ("RV"), manufactured housing ("MH"), marine and industrial
markets, today reported its financial results for the fourth
quarter and full year ended December
31, 2017.
Fourth Quarter 2017 Financial Results
Net sales for the fourth quarter of 2017 increased $151.7 million or 47%, to $475.6 million from $323.9
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 68% of fourth quarter 2017 sales,
increased 44%, while RV industry wholesale unit shipments increased
approximately 19% in the fourth quarter of 2017 compared to the
prior year. Revenues from the MH industry, which represented
13% of fourth quarter 2017 sales, increased 30% from the fourth
quarter of 2016, while wholesale unit shipments in the MH industry
rose approximately 15% for the same period. Revenues from the
industrial market, which is tied primarily to residential housing,
commercial construction, and institutional furniture spending,
increased 37%. The industrial market accounted for 11% of the
Company's fourth quarter 2017 sales. Revenues from the marine
industry represented 8% of the Company's fourth quarter 2017 sales
and nearly tripled compared to the fourth quarter of
2016.
For the fourth quarter of 2017, Patrick reported operating
income of $34.1 million, an increase
of 54% or $12.0 million, from the
$22.1 million reported in the fourth
quarter of 2016. Net income in the fourth quarter of 2017
increased 114% to $29.0 million
from $13.6 million in the fourth
quarter of 2016, and net income per diluted share increased 97% to
$1.16 from $0.59. For the fourth quarter of 2017, net
income includes the impact of a one-time tax benefit of
$7.4 million, or $0.29 per diluted share, due to the recently
enacted Tax Cuts and Jobs Act.
Todd Cleveland, Chief Executive
Officer, said, "We are pleased with our operating and financial
performance in the fourth quarter, which was driven by the
continued strength in all of our primary markets, the
continued dedication and commitment of our team members, targeted
geographic and product expansions, and the successful execution of
strategic acquisitions, including our latest acquisitions of
Indiana Transport, LMI, and Nickell
Moulding in the fourth quarter of 2017."
"Momentum and discipline have remained strong in the RV
industry, with double-digit quarterly wholesale unit shipment
growth in each quarter of 2017 and full year shipments finishing
the year at over 504,000 units," stated Andy Nemeth, President. "At the same time, the
increase in wholesale production levels is aligned with RV retail
traffic, sales increases, and seasonal demand patterns, supporting
balanced retail inventories in anticipation of a solid 2018 selling
season. Additionally, the marine powerboat retail market
experienced gains over the prior year with unit sales up an
estimated 6% in 2017. The ongoing strength in demographic
trends and the allure of the outdoor, leisure family-oriented
lifestyle continue to draw a strong influx of new buyers into both
the RV and marine markets. Our housing and industrial
business growth has continued as well, bolstered by similar
demographic trends, low interest rates, improving consumer credit,
and a strengthening economy and jobs environment."
Full Year 2017 Financial Results
Net sales for 2017 increased approximately $414 million or 34%, to $1.6 billion from $1.2
billion in 2016. The Company's revenues from the RV
industry, which represented 69% of its 2017 sales, increased 28%,
while RV industry wholesale unit shipments increased approximately
17% in 2017 from 2016. Additionally, revenues from the MH
industry, which represented 13% of the Company's 2017 sales, rose
29% from 2016, while MH industry wholesale unit shipments increased
approximately 14%. Revenues from the industrial market
increased 27% and benefited primarily from acquisitions and market
share gains, particularly related to the residential housing
market. The industrial market, which accounted for 11% of the
Company's 2017 sales, saw new housing starts increase by
approximately 2% for 2017 compared to the prior year. The
Company's revenues from the marine industry represented 7% of its
2017 sales and more than tripled year-over-year.
The Company's RV content per unit (excluding revenues from the
marine market which were previously included with RV revenues) for
the full year 2017 increased approximately 9% to $2,232 from $2,039
for 2016. The MH content per unit for the full year 2017
increased approximately 16% to $2,289
from $1,966 for 2016.
For 2017, Patrick reported operating income of $121.9 million, an increase of $31.1 million or 34%, from the $90.8 million reported in 2016. Net income
in 2017 increased 54% to $85.7
million from $55.6 million in
2016, and net income per diluted share increased 43% to
$3.48 from $2.43.
For 2017, net income includes the impact of the previously
mentioned one-time tax benefit of $7.4
million, or $0.29 per diluted
share, resulting from the recently enacted tax legislation. In
addition, 2017 net income and net income per diluted share were
increased by $6.0 million and
$0.23, respectively, as a result of
adopting the share-based payment awards accounting standard. For
2016, adoption of this standard increased net income by
$1.3 million or $0.05 per diluted share.
Total debt, net of cash on hand, increased by $85.0 million from $266.1
million at December 31, 2016
to $351.1 million at December 31, 2017, primarily reflecting the
Company's investment of $274.3
million, in the aggregate, for acquisitions and capital
expenditures in 2017, partially offset by net proceeds of
$93.3 million from the Company's
common stock offering in March 2017
and operating cash flows.
Patrick's total assets increased $331.6
million to $866.6 million at
December 31, 2017 from $535.0 million at December
31, 2016, primarily reflecting the addition of
acquisition-related assets and overall growth.
As previously announced in January
2018, the Company's Board of Directors approved a new stock
repurchase program that authorizes the repurchase of up to
$50 million of the Company's common
stock over a 24-month period.
In addition, as previously announced, on January 22, 2018,
the Company completed an offering of $172.5 million aggregate principal amount of its
Convertible Senior Notes due 2023 ("Convertible Notes") in a
private placement. Net proceeds from the issuance of the
Convertible Notes were approximately $154
million after deducting purchase discounts and commissions,
estimated offering expenses, and the net cost of the convertible
note hedge and warrant transactions associated with the offering to
reduce potential dilution. In conjunction with the Convertible
Notes offering, the Company entered into amendments to its credit
agreement to permit the issuance of the Convertible Notes and to
expand its credit facility by $50
million to $500 million.
"The capital capacity and flexibility provided by both the note
offering and the expansion of the credit facility position us with
the dry powder to continue to execute on our long-term strategic
growth initiatives and disciplined capital allocation strategy,"
Mr. Nemeth stated. "Consistent with past practices, we intend
to put our strong cash flows and financing platform to work and
continue to invest in our overall business model and brands through
acquisitions, strategic capital expenditures, geographic and
product line expansions, and workforce planning, engagement and
development initiatives to support our organizational strategic
agenda. In addition, we believe that the businesses we
acquired in 2017 are well-positioned to enhance their brands and
deliver revenue and profitability growth."
"As we look ahead to 2018 and beyond,
we remain optimistic about the long-term growth potential in the RV
and marine industries and we continue to increase our market
penetration in the housing and industrial sector, achieving market
share gains and adding additional content per unit. We believe that
the strength of our operational and financial foundation, our
customer first performance-oriented culture, and the exceptional
talent and passion of our more than 6,800 team members will
continue to position us to execute on our strategic plan to deliver
strong growth on both the top and bottom line, drive shareholder
value, and exceed our customers' expectations," Mr. Cleveland
further stated.
Conference Call Webcast
As previously announced, Patrick Industries will host an online
webcast of its fourth quarter 2017 earnings conference call that
can be accessed on the Company's website, www.patrickind.com, under
"Investor Relations," on Thursday, February
15, 2018 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 20 states and in China. 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 and tile systems, thermoformed shower
surrounds, specialty bath and closet building products, 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
Ended
|
|
Twelve Months
Ended
|
(thousands except per
share data)
|
Dec. 31,
2017
|
|
Dec. 31,
2016
|
|
Dec. 31,
2017
|
|
Dec. 31,
2016
|
|
|
|
|
|
|
|
|
NET
SALES
|
$
|
475,570
|
|
|
$
|
323,936
|
|
|
$
|
1,635,653
|
|
|
$
|
1,221,887
|
|
Cost of goods
sold
|
394,887
|
|
|
270,955
|
|
|
1,356,738
|
|
|
1,019,418
|
|
GROSS PROFIT
|
80,683
|
|
|
52,981
|
|
|
278,915
|
|
|
202,469
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Warehouse and
delivery
|
14,463
|
|
|
9,932
|
|
|
46,905
|
|
|
36,081
|
|
Selling, general and
administrative
|
26,981
|
|
|
17,262
|
|
|
90,736
|
|
|
62,183
|
|
Amortization of intangible
assets
|
5,135
|
|
|
3,688
|
|
|
19,374
|
|
|
13,368
|
|
Total operating expenses
|
46,579
|
|
|
30,882
|
|
|
157,015
|
|
|
111,632
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
34,104
|
|
|
22,099
|
|
|
121,900
|
|
|
90,837
|
|
Interest expense,
net
|
2,631
|
|
|
1,987
|
|
|
8,790
|
|
|
7,185
|
|
Income
before income taxes
|
31,473
|
|
|
20,112
|
|
|
113,110
|
|
|
83,652
|
|
Income taxes
|
2,427
|
|
|
6,552
|
|
|
27,392
|
|
|
28,075
|
|
NET
INCOME
|
$
|
29,046
|
|
|
$
|
13,560
|
|
|
$
|
85,718
|
|
|
$
|
55,577
|
|
|
|
|
|
|
|
|
|
BASIC NET INCOME
PER COMMON SHARE (1)
|
$
|
1.18
|
|
|
$
|
0.60
|
|
|
$
|
3.54
|
|
|
$
|
2.47
|
|
DILUTED NET INCOME
PER COMMON SHARE (1)
|
$
|
1.16
|
|
|
$
|
0.59
|
|
|
$
|
3.48
|
|
|
$
|
2.43
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding - Basic (1)
|
24,675
|
|
|
22,565
|
|
|
24,230
|
|
|
22,520
|
|
Weighted average
shares outstanding - Diluted (1)
|
25,105
|
|
|
22,976
|
|
|
24,643
|
|
|
22,896
|
|
|
(1) Net income per
common share and weighted average shares outstanding, on both a
basic and diluted basis, for the fourth quarter and twelve months
ended December 31, 2016, reflect the impact of the three-for-two
stock split paid on December 8, 2017.
|
PATRICK
INDUSTRIES, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
|
|
|
|
|
|
|
|
|
|
As of
|
(thousands)
|
Dec. 31,
2017
|
|
Dec. 31,
2016
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
2,767
|
|
|
$
|
6,449
|
|
Trade receivables,
net
|
77,784
|
|
|
38,455
|
|
Inventories
|
175,270
|
|
|
120,019
|
|
Prepaid expenses and
other
|
18,132
|
|
|
7,846
|
|
Total current assets
|
273,953
|
|
|
172,769
|
|
Property, plant
and equipment, net
|
118,486
|
|
|
85,483
|
|
Goodwill and
intangible assets, net
|
471,511
|
|
|
274,432
|
|
Deferred
financing costs, net
|
2,184
|
|
|
1,728
|
|
Other
non-current assets
|
510
|
|
|
538
|
|
TOTAL ASSETS
|
$
|
866,644
|
|
|
$
|
534,950
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Current maturities of
long-term debt
|
$
|
15,766
|
|
|
$
|
15,766
|
|
Accounts payable
|
84,109
|
|
|
46,752
|
|
Accrued
liabilities
|
36,550
|
|
|
23,575
|
|
Total current liabilities
|
136,425
|
|
|
86,093
|
|
Long-term debt,
less current maturities, net
|
338,111
|
|
|
256,811
|
|
Deferred tax
liabilities, net
|
13,640
|
|
|
4,988
|
|
Other long-term
liabilities
|
7,783
|
|
|
1,610
|
|
TOTAL LIABILITIES
|
495,959
|
|
|
349,502
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
Common
stock
|
163,196
|
|
|
63,716
|
|
Additional
paid-in-capital
|
8,243
|
|
|
8,243
|
|
Accumulated
other comprehensive income
|
66
|
|
|
27
|
|
Retained
earnings
|
199,180
|
|
|
113,462
|
|
TOTAL SHAREHOLDERS' EQUITY
|
370,685
|
|
|
185,448
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
866,644
|
|
|
$
|
534,950
|
|
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SOURCE Patrick Industries, Inc.