U.S. markets open in 4 hours 2 minutes
  • S&P Futures

    4,382.75
    +34.50 (+0.79%)
     
  • Dow Futures

    34,147.00
    +308.00 (+0.91%)
     
  • Nasdaq Futures

    15,113.75
    +104.25 (+0.69%)
     
  • Russell 2000 Futures

    2,203.20
    +26.40 (+1.21%)
     
  • Crude Oil

    71.35
    +1.06 (+1.51%)
     
  • Gold

    1,765.00
    +1.20 (+0.07%)
     
  • Silver

    22.22
    +0.05 (+0.23%)
     
  • EUR/USD

    1.1738
    +0.0011 (+0.09%)
     
  • 10-Yr Bond

    1.3090
    0.0000 (0.00%)
     
  • Vix

    22.95
    +2.14 (+10.28%)
     
  • GBP/USD

    1.3689
    +0.0030 (+0.22%)
     
  • USD/JPY

    109.5580
    +0.1380 (+0.13%)
     
  • BTC-USD

    43,250.54
    -1,846.47 (-4.09%)
     
  • CMC Crypto 200

    1,086.02
    -48.36 (-4.26%)
     
  • FTSE 100

    6,970.28
    +66.37 (+0.96%)
     
  • Nikkei 225

    29,839.71
    -660.34 (-2.17%)
     

Patrick Industries, Inc. Reports Second Quarter 2021 Financial Results

  • Oops!
    Something went wrong.
    Please try again later.
·13 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Second Quarter 2021 Highlights (compared to Second Quarter 2020 unless otherwise noted)

- Net sales of $1.02 billion, driven by continued growth in leisure lifestyle and housing

- Operating income of $95.3 million

- Operating margin of 9.3%

- Net income of $59.0 million

- Diluted earnings per share of $2.52

- Operating cash flows of $28.4 million

- Acquisitions of SeaDek and Alpha Systems

- $350 million notes offering due 2029 and credit facility expansion and extension

ELKHART, Ind., July 29, 2021 /PRNewswire/ -- Patrick Industries, Inc. (NASDAQ: PATK), a leading component solutions provider for the RV, marine, manufactured housing ("MH") and industrial markets today reported financial results for the second quarter ended June 27, 2021.

(PRNewsfoto/Patrick Industries, Inc.)
(PRNewsfoto/Patrick Industries, Inc.)

Net sales in the second quarter of 2021 increased $596.0 million, or 141%, to $1.02 billion from $424.0 million in the second quarter of 2020. The increase reflects continued strong performance in RV and marine as well as MH and industrial end markets. Second quarter 2020 net sales reflect the impact of COVID-19 related production shutdowns.

Operating income of $95.3 million increased $83.2 million, from $12.1 million in the second quarter of 2020. Operating margin of 9.3% in the second quarter of 2021 increased 640 basis points compared to 2.9% in the same period a year ago. Second quarter 2020 operating income and operating margin reflect the impact of COVID-19 related production shutdowns.

Net income was $59.0 million compared to $0.7 million in the second quarter of 2020. Diluted earnings per share was $2.52 for the second quarter of 2021 compared to $0.03 for the second quarter of 2020.

"Strong trends in both retail and wholesale market conditions in all four of our primary markets contributed to our growth in the second quarter of 2021 over last year and sequentially compared to the first quarter of 2021 as leisure outdoor activities and housing and home improvement activities continued to improve," said Andy Nemeth, Chief Executive Officer. "Our team members across our platform have executed in incredibly dynamic market conditions, allowing us to maximize the capabilities of our manufacturing and distribution footprint and leverage our fixed cost structure. Additionally, we continued the strategic expansion of our product portfolio in the quarter through our acquisition of Alpha Systems with its suite of RV, marine, and MH solutions and the further extension of our growing marine footprint through our acquisition of SeaDek and its industry-leading branded solutions and products."

Jeff Rodino, President, said, "The imbalance of low dealer inventory levels in each of our end markets against strong retail demand has further pushed out the start of the channel restocking cycle. We continue to focus on meeting the needs of our customers and aligning our culture for the long-term as we evaluate the many opportunities in front of us to further drive growth and value both strategically and organically. Industry-wide material supply chain challenges have continued, and we have been impressed by the creativity, flexibility, and innovative thought process of our customers and team members as they continue to work in partnership to address these challenges."

Second Quarter 2021 Revenue by Market Sector
(compared to Second Quarter 2020 unless otherwise noted)

RV (58% of Revenue)

  • Revenue of $595.4 million increased 192% while wholesale RV industry unit shipments increased 101%

  • Content per wholesale RV unit (on a trailing twelve-month basis) increased 15% to $3,543

Marine (16% of Revenue)

  • Revenue of $166.5 million increased 182% while estimated wholesale powerboat industry unit shipments increased 26%

  • Estimated content per wholesale powerboat unit (on a trailing twelve-month basis) increased 60% to $2,841

MH (14% of Revenue)

  • Revenue of $139.1 million increased 54% while estimated wholesale MH industry unit shipments increased 30%

  • Estimated content per wholesale MH unit (on a trailing twelve-month basis) increased 7% to $4,806

Industrial (12% of Revenue)

  • Revenue of $119.0 million increased 69% while housing starts increased 43%

"As we continue to capitalize on the strengths of our leisure lifestyle and housing and industrial markets, we have also been reinvesting in our infrastructure, including software, automation, innovation, human capital, and expansion initiatives to position Patrick and our culture for the long term in anticipation of continued expected strong future demand," said Mr. Nemeth.

Balance Sheet, Cash Flow and Capital Allocation

Operating cash flow for the second quarter of 2021 was $28.4 million, compared to $26.2 million in the second quarter of 2020, reflecting our strong operating performance as well as continued strategic and proactive investment in inventory and the growth of accounts receivable in line with growth in revenue. Business acquisitions in the second quarter of 2021 totaled $238.9 million, including the previously announced acquisitions of Hyperform Inc., which operates under the SeaDek brand name in the marine OEM market and aftermarket, and Alpha Systems, a leading manufacturer for the RV, marine, and MH markets. Capital expenditures in the second quarter of 2021 totaled $12.1 million, compared to $3.7 million in the second quarter of 2020, as initiatives to automate and increase production capacity continue.

In alignment with our capital allocation strategy, we returned $28.2 million to shareholders in the second quarter of 2021, including $21.6 million through the opportunistic repurchase of 260,000 shares and $6.6 million of dividends.

Our net debt at the end of the quarter was approximately $1.05 billion, resulting in a net leverage ratio of 2.3x (as calculated in accordance with our credit agreement). Available liquidity, comprised of borrowing availability under our credit facility and cash on hand, was approximately $468 million. During the quarter we issued $350 million of 4.75% senior notes due 2029, increased the capacity of our senior secured credit facility to $700 million and extended the maturity of the credit facility to April 2026.

Business Outlook and Summary

"Historically lean dealer inventories, strong retail demand, and substantial OEM and builder backlogs continue to position our end markets for growth into the second half of 2021 and through 2022," said Mr. Nemeth. "Our proactive investments in systems, infrastructure, and our people, in combination with our liquidity and disciplined capital allocation strategy, are expected to continue to enhance and reinforce our solid operating model and foundation."

Conference Call Webcast

As previously announced, Patrick Industries will host an online webcast of its second quarter 2021 earnings conference call that can be accessed on the Company's website, www.patrickind.com, under "Investor Relations," on Thursday, July 29, 2021 at 10:00 a.m. Eastern time. In addition, a supplemental earnings presentation can be accessed on the Company's website, www.patrickind.com under "Investor Relations - Presentations."

About Patrick Industries, Inc.

Patrick Industries (NASDAQ: PATK) is a leading component solutions provider for the RV, marine, manufactured housing and various industrial markets – including single and multi-family housing, hospitality, institutional and commercial markets. Founded in 1959, Patrick is based in Elkhart, Indiana, with over 10,000 employees and 160 businesses across the United States.

Use of Financial Metrics

In addition to reporting financial results in accordance with U.S. GAAP, the Company also provides financial metrics, such as net leverage ratio, content per unit, net debt and available liquidity, which we believe are important measures of the Company's business performance. These metrics should not be considered alternatives to U.S. GAAP. Our computations of net leverage ratio, content per unit, net debt and available liquidity may differ from similarly titled measures used by others. We calculate net debt by subtracting cash and cash equivalents from the gross value of debt outstanding. RV wholesale unit shipments are provided by the RV Industry Association. Marine wholesale unit shipments are provided by the National Marine Manufacturers Association. MH wholesale unit shipments are provided by the Manufactured Housing Institute. Housing starts are provided by the U.S. Census Bureau. You should not consider these metrics in isolation or as substitutes for an analysis of our results as reported under U.S. GAAP.

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 the continuing financial and operational uncertainty due to the COVID-19 pandemic, including its impact on the overall economy, our sales, customers, operations, team members, suppliers, and the countries where we have operations or from which we source products and raw materials, such as China; adverse economic and business conditions, including cyclicality and seasonality in the industries we sell our products; the deterioration of the financial condition of our customers or suppliers; the ability to adjust our production schedules up or down quickly in response to rapid changes in demand; the loss of a significant customer; changes in consumer preferences; pricing pressures due to competition; conditions in the credit market limiting the ability of consumers and wholesale customers to obtain retail and wholesale financing for RVs, manufactured homes, and marine products; the imposition of restrictions and taxes on imports of raw materials and components used in our products; information technology performance and security; any increased cost or limited availability of certain raw materials; the impact of governmental and environmental regulations, and our inability to comply with them; our level of indebtedness; the ability to remain in compliance with our credit agreement covenants; the availability and costs of labor and production facilities and the impact of labor shortages; inventory levels of retailers and manufacturers; the ability to generate cash flow or obtain financing to fund growth; future growth rates in the Company's core businesses; 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; the ability to retain key executive and management personnel; the disruption of business resulting from natural disasters or other unforeseen events, and adverse weather conditions impacting retail sales.

There can be no assurance that any forward-looking statement will be realized or that actual results will not be significantly different from that set forth in such forward-looking statement. Information about certain risks that could affect our business and cause actual results to differ from those expressed or implied in the forward-looking statements are contained in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and in the Company's Forms 10-Q 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. Each forward-looking statement speaks only as of the date of this press release, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date on which it is made.


PATRICK INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


















Second Quarter Ended


Six Months Ended

(thousands except per share data)

June 27, 2021


June 28, 2020


June 27, 2021


June 28, 2020









NET SALES

$

1,019,953



$

424,045



$

1,870,436



$

1,013,277


Cost of goods sold

815,476



350,324



1,504,427



830,075


GROSS PROFIT

204,477



73,721



366,009



183,202










Operating Expenses:








Warehouse and delivery

34,815



20,209



64,728



44,941


Selling, general and administrative

60,365



31,628



111,597



67,497


Amortization of intangible assets

14,031



9,778



25,937



19,379


Total operating expenses

109,211



61,615



202,262



131,817










OPERATING INCOME

95,266



12,106



163,747



51,385


Interest expense, net

14,580



10,821



25,759



21,313


Income before income taxes

80,686



1,285



137,988



30,072


Income taxes

21,701



571



31,490



8,171


NET INCOME

$

58,985



$

714



$

106,498



$

21,901










BASIC NET INCOME PER COMMON SHARE

$

2.57



$

0.03



$

4.66



$

0.96


DILUTED NET INCOME PER COMMON SHARE

$

2.52



$

0.03



$

4.56



$

0.95










Weighted average shares outstanding - Basic

22,948



22,667



22,844



22,840


Weighted average shares outstanding - Diluted

23,435



22,932



23,360



23,098


PATRICK INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)










As of

(thousands)

June 27, 2021


December 31, 2020

ASSETS




Current Assets




Cash and cash equivalents

$

58,402



$

44,767


Trade receivables, net

264,296



132,505


Inventories

406,235



312,809


Prepaid expenses and other

34,691



37,982


Total current assets

763,624



528,063


Property, plant and equipment, net

298,022



251,493


Operating lease right-of-use assets

139,576



117,816


Goodwill and intangible assets, net

1,016,825



852,076


Other non-current assets

6,660



3,987


TOTAL ASSETS

$

2,224,707



$

1,753,435






LIABILITIES AND SHAREHOLDERS' EQUITY




Current Liabilities




Current maturities of long-term debt

$

7,500



$

7,500


Current operating lease liabilities

35,951



30,901


Accounts payable

164,646



105,786


Accrued liabilities

120,695



83,202


Total current liabilities

328,792



227,389


Long-term debt, less current maturities, net

1,076,950



810,907


Long-term operating lease liabilities

105,318



88,175


Deferred tax liabilities, net

48,734



39,516


Other long-term liabilities

21,642



28,007


TOTAL LIABILITIES

1,581,436



1,193,994






SHAREHOLDERS' EQUITY




Common stock

191,131



180,892


Additional paid-in-capital

24,387



24,387


Accumulated other comprehensive loss

(4,129)



(6,052)


Treasury stock

(21,550)




Retained earnings

453,432



360,214


TOTAL SHAREHOLDERS' EQUITY

643,271



559,441


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

2,224,707



$

1,753,435


PATRICK INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)







Six Months Ended

(thousands)

June 27,


June 28,


2021


2020

CASH FLOWS FROM OPERATING ACTIVITIES




Net income

$

106,498



$

21,901


Depreciation and amortization

48,715



34,689


Stock-based compensation expense

10,336



6,347


Amortization of convertible notes debt discount

3,643



3,505


Other adjustments to reconcile net income to net cash provided by operating activities

10,426



(4,330)


Change in operating assets and liabilities, net of acquisitions of businesses

(100,873)



(22,740)


Net cash provided by operating activities

78,745



39,372


CASH FLOWS FROM INVESTING ACTIVITIES




Capital expenditures

(26,345)



(11,305)


Business acquisitions and other investing activities

(254,548)



(23,712)


Net cash used in investing activities

(280,893)



(35,017)


NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES

215,783



(32,683)


Increase (decrease) in cash and cash equivalents

13,635



(28,328)


Cash and cash equivalents at beginning of year

44,767



139,390


Cash and cash equivalents at end of period

$

58,402



$

111,062


Cision
Cision

View original content to download multimedia:https://www.prnewswire.com/news-releases/patrick-industries-inc-reports-second-quarter-2021-financial-results-301344237.html

SOURCE Patrick Industries, Inc.