Patrick Industries Inc (PATK) Reports Q3 2023 Earnings
Patrick Industries Inc (NASDAQ:PATK) reports Q3 2023 net sales of $866 million, a decrease of 22% from Q3 2022.
Operating margin declined 10 basis points to 8.2% during the quarter.
Adjusted EBITDA of $113 million decreased 14%; adjusted EBITDA margin increased 130 basis points to 13.1%.
Free cash flow through the third quarter of 2023 was $412 million, an increase of 64% compared to $250 million through the third quarter of 2022.
Patrick Industries Inc (NASDAQ:PATK) released its Q3 2023 earnings report on October 26, 2023. The company reported net sales of $866 million, a decrease of 22% from $1.11 billion in Q3 2022. This decline was primarily due to a decrease in unit shipments across end markets and lower pricing passed on to customers to reflect changes in certain commodity costs, partially offset by market share gains.
Financial Performance
Operating income for Q3 2023 was $71 million, a decrease from $93 million in Q3 2022. The operating margin of 8.2% decreased 10 basis points compared to 8.3% in the same period a year ago, primarily due to the impact of lower net sales, absorption on certain fixed distribution expenses, and an increase in non-cash amortization due to acquisitions.
Net income decreased 33% to $40 million from $59 million in Q3 2022. Diluted earnings per share of $1.81 decreased 26% compared to $2.43 for Q3 2022.
Our operating results for the third quarter of 2023 are a reflection of our teams thoughtful discipline to manage our business and drive resilient operating margins in a very dynamic environment, despite the continued reduction in shipments across our end markets, said Andy Nemeth, Chief Executive Officer.
Balance Sheet and Cash Flow
The company reported an inventory reduction of $150 million from year-end 2022 and $216 million from the end of Q3 2022. Cash provided by operations for the first nine months of 2023 was $294 million versus $230 million for the same period last year.
On a trailing twelve-month basis, free cash flow through Q3 2023 was $412 million, an increase of 64% compared to $250 million through Q3 2022. The company's long-term debt decreased approximately $112 million during Q3 2023, principally due to net repayments on its revolving credit facility.
Business Outlook
Despite the challenges, the company remains confident in its ability to navigate the current macroeconomic environment while continuing to reinvest in its business. The company's solid balance sheet and liquidity position, along with the teams dedication to operational excellence and customer service, are expected to drive future performance.
Patrick Industries Inc (NASDAQ:PATK) is a leading component solutions provider for the RV, Marine, and Housing markets. The company is based in Elkhart, Indiana, employing approximately 10,000 team members throughout the United States.
Explore the complete 8-K earnings release (here) from Patrick Industries Inc for further details.
This article first appeared on GuruFocus.
