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News Release

Patrick Industries, Inc. Reports First Quarter 2018 Financial Results

ELKHART, Ind., April 26, 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 first quarter ended April 1, 2018. 

 (PRNewsfoto/Patrick Industries, Inc.)

First Quarter 2018 Financial Results

Net sales for the first quarter of 2018 increased $206.4 million or 60%, to $551.8 million from $345.4 million in the same quarter of 2017. 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 first quarter 2018 sales, increased 53% as industry wholesale unit shipments increased approximately 13% in the first quarter of 2018 compared to the prior year.  Revenues from the marine industry represented 8% of the Company's first quarter 2018 sales and more than tripled over the first quarter of 2017.  Revenues from the MH industry, which represented 11% of first quarter 2018 sales, increased 43% compared to the prior year period with an estimated increase in MH wholesale unit shipments of approximately 10% from the first quarter of 2017.  Revenues from the industrial market, which is tied primarily to residential housing, commercial construction, and institutional furniture spending, increased 64%. The industrial market, which accounted for 12% of the Company's first quarter 2018 sales, saw new housing starts increase approximately 8% in the quarter.

The Company's RV content per unit (on a trailing twelve-month basis) for the first quarter of 2018 increased approximately 17% to $2,414 from $2,063 for the first quarter of 2017.  MH content per unit (on a trailing twelve-month basis) for the first quarter of 2018 increased approximately 18% to an estimated $2,375 from $2,015 for the first quarter of 2017.

For the first quarter of 2018, Patrick reported operating income of $41.8 million, an increase of 75% or $17.9 million, from $23.9 million reported in the first quarter of 2017.  Net income in the first quarter of 2018 increased 72% to $30.1 million from $17.5 million in the first quarter of 2017, and net income per diluted share increased 60% to $1.20 from $0.75

Todd Cleveland, Chief Executive Officer, said, "Our first quarter results reflect the continued execution and traction of our strategic and operational initiatives, coupled with the ongoing momentum in our primary markets. The investments we have made in production efficiency improvements, targeted geographic and product expansions, employee talent and retention initiatives, and strategic acquisitions in our core markets, are all generating the expected returns based on our model. During the first quarter, we completed four acquisitions - Metal Moulding and Aluminum Metals in February 2018, and Indiana Marine Products and Collins & Company in March 2018."

"Both our leisure family lifestyle markets and our housing and industrial markets are fundamentally strong with early indicators and demographic drivers pointing towards continued growth," stated Andy Nemeth, President.  "Based on the most recently available data, RV and marine retail sales and new housing formations are off to a solid start for the year, and match up well with recent historical seasonal trends and demand patterns.  Attendance levels and excitement generated at the early spring industry retail and trade shows support our optimism about the sustainable long-term potential in our key markets, and we are committed to putting capital to work in alignment with our disciplined capital allocation strategy to drive improved performance and shareholder value while continuing to position ourselves to be able to fully support our customers."

As part of its allocation strategy, the Company invested $117.0 million in the aggregate in the first quarter of 2018 for acquisitions, stock repurchases, and capital expenditures. In addition, as previously announced in January 2018, the Company's Board of Directors approved a new stock repurchase program that authorized the purchase of up to $50 million of the Company's common stock over a 24-month period.  Year-to-date through April 24, 2018, the Company repurchased 720,695 shares at an average price of $57.56 per share for a total cost of $41.5 million.

"In anticipation of continued growth in 2018 and beyond in all four of our end markets, we are optimistic about the opportunities to drive our business and execute on our strategic growth plan, gain market share, expand operations in targeted regional territories, and drive shareholder value," Mr. Cleveland further stated.  "We expect to continue to make targeted capital investments to support our new business initiatives and maintain our balanced approach to leveraging our operating platform, introduce new products and product line extensions, and execute on our organic and acquisition-related objectives."

Conference Call Webcast

As previously announced, Patrick Industries will host an online webcast of its first quarter 2018 earnings conference call that can be accessed on the Company's website, www.patrickind.com,  under "Investor Relations," on Thursday, April 26, 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, appliances, 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, 2017, 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)

Apr. 1, 2018


Mar. 26, 2017





NET SALES

$

551,832



$

345,427


Cost of goods sold

454,078



287,878


           GROSS PROFIT

97,754



57,549






 Operating Expenses:




     Warehouse and delivery

17,028



10,343


     Selling, general and administrative

31,841



19,106


     Amortization of intangible assets

7,127



4,185


           Total operating expenses

55,996



33,634






OPERATING INCOME

41,758



23,915


     Interest expense, net

4,378



2,014


 Income before income taxes

37,380



21,901


     Income taxes

7,312



4,434


NET INCOME

$

30,068



$

17,467






BASIC NET INCOME PER COMMON SHARE (1)

$

1.22



$

0.76


DILUTED NET INCOME PER COMMON SHARE (1)

$

1.20



$

0.75






Weighted average shares outstanding - Basic (1)

24,740



22,857


Weighted average shares outstanding - Diluted (1)

25,110



23,324



(1) Net income per common share and weighted average shares outstanding, on both a basic and diluted basis, for the first quarter ended March 26, 2017, 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)

Apr. 1, 2018


Dec. 31, 2017

ASSETS




Current Assets




     Cash and cash equivalents

$

71



$

2,767


     Trade receivables, net

138,685



77,784


     Inventories

205,902



175,270


     Prepaid expenses and other

16,039



18,132


           Total current assets

360,697



273,953


 Property, plant and equipment, net

129,022



118,486


 Goodwill and intangible assets, net

536,976



471,511


 Deferred financing costs, net

2,356



2,184


 Other non-current assets

494



510


          TOTAL ASSETS

$

1,029,545



$

866,644






LIABILITIES AND SHAREHOLDERS' EQUITY




Current Liabilities




     Current maturities of long-term debt

$

15,766



$

15,766


     Accounts payable

114,380



84,109


     Accrued liabilities

49,294



36,550


         Total current liabilities

179,440



136,425


 Long-term debt, less current maturities, net

413,146



338,111


 Deferred tax liabilities, net

15,050



13,640


 Other long-term liabilities

16,131



7,783


          TOTAL LIABILITIES

623,767



495,959






 SHAREHOLDERS' EQUITY




 Common stock

162,625



163,196


 Additional paid-in-capital

25,785



8,243


 Accumulated other comprehensive income

94



66


 Retained earnings

217,274



199,180


          TOTAL SHAREHOLDERS' EQUITY

405,778



370,685


          TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,029,545



$

866,644


 

 

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SOURCE Patrick Industries, Inc.

Julie Ann Kotowski, Investor Relations, kotowskj@patrickind.com, 574.294.7511