Elkhart-based Patrick Industries Inc. (Nasdaq: PATK) is reporting first quarter net income of $6.9 million, compared to $6 million during the same period the previous year. Chief Executive Officer Todd Cleveland says severe winter weather did increase some costs, but did not have a significant impact on the bottom line. April 24, 2014
ELKHART, Ind. – Patrick Industries, Inc. (NASDAQ: PATK), a major manufacturer and distributor of building and component products for the recreational vehicle (“RV”), manufactured housing (“MH”) and industrial markets, today reported its financial results for the first quarter ended March 30, 2014.
First Quarter 2014 Financial Results
Net sales for the first quarter of 2014 increased $28.0 million or 19.7%, to $170.1 million from $142.1 million in the same quarter of 2013. The increase was primarily attributable to a 21% increase in the Company's revenue from the RV industry, which represented approximately 76% of the Company's first quarter 2014 sales. Sales to the MH industry increased 12%, while sales to the industrial markets increased 24%. The Company estimates that wholesale unit shipments to the RV industry increased approximately 11% in the first quarter of 2014 compared to the first quarter of 2013. Additionally, the Company estimates that wholesale unit shipments to the MH industry, which represented approximately 13% of first quarter 2014 sales, rose approximately 4% from the first quarter of 2013. The industrial market sector, which is primarily tied to the residential housing and commercial and retail fixtures markets, accounted for 11% of the Company's first quarter 2014 sales, and reflected an approximate 2% decrease in new housing starts in the first quarter of 2014 compared to the prior year. The Company estimates that approximately 57% of its industrial market sales are linked to the residential housing sector and its sales to the industrial markets generally lag new housing starts by approximately six to nine months.
Excluding the revenue contributions of acquisitions completed in 2013, the Company estimates its organic growth in the first quarter of 2014 at approximately 13%, or $17.5 million of its total revenue increase. The Company estimates that this organic growth was comprised of growth resulting from market share gains of approximately 3% and growth tied to overall industry improvement of approximately 10%. The remaining $10.5 million of the revenue increase in the first quarter of 2014 was attributable to the incremental contribution of the 2013 acquisitions (including related market share and industry growth), resulting in incremental growth of approximately 7%.
The Company's RV content per unit for the first quarter of 2014 increased approximately 20% to an estimated $1,373 from $1,142 for the first quarter of 2013. The MH content per unit for the first quarter of 2014 increased approximately 2% to an estimated $1,605 from $1,580 for the same period in 2013.
“We are pleased with our revenues and our operating income performance in the first quarter of 2014. The severe winter weather we experienced in the Midwest in early 2014 did cause some additional costs related to production, scheduling, and delivery inefficiencies, but the impact was not significant to our overall operating results in the first quarter. We did see a continuing seasonal sales pickup each month consistent with our expectations and general positive industry sentiment, and we continue to believe that all three of the primary markets we serve are well positioned for further growth in 2014,” said Todd Cleveland, President and Chief Executive Officer.
Patrick reported operating income of $11.8 million in the first quarter of 2014, an increase of $1.4 million or 13% from the $10.4 million reported in the first quarter of 2013. First quarter 2014 net income was $6.9 million or $0.64 per diluted share compared to net income of $6.0 million or $0.55 per diluted share in the first quarter of 2013.
On February 13, 2014, the Company's Board of Directors authorized an increase in the amount of the Company's stock that may be acquired through the existing stock repurchase program over the next 12 months to $20.0 million, including approximately $3.9 million available under the previous authorization. There were no stock repurchases made during the first quarter ended March 30, 2014. In the second quarter of 2014 through April 18, 2014, the Company repurchased 16,900 shares at an average price of $40.01 per share for a total cost of approximately $0.7 million. Since the inception of the stock repurchase program in February 2013, the Company has repurchased in the aggregate 424,230 shares at an average price of $15.92 per share for a total cost of approximately $6.8 million.
“We continue to make progress in positioning our business to maximize the benefits of our strategic initiatives and bring increasing value to our customers,” said Mr. Cleveland. “We are excited about the opportunities that exist in our markets and the positive outlook for the industries that we serve. We look forward to building on our competitive strengths, applying our capital allocation strategy, and achieving our goal of continually exceeding our customers' expectations.”
About Patrick Industries
Patrick Industries, Inc. (www.patrickind.com) is a major manufacturer of component products and distributor of building products serving the recreational vehicle, manufactured housing, kitchen cabinet, office and household furniture, fixtures and commercial furnishings, marine, and other industrial markets and operates coast-to-coast through locations in 10 states. Patrick's major manufactured products include decorative vinyl and paper laminated panels, countertops, wrapped profile mouldings, slide out trim and fascia, cabinet doors and components, hardwood furniture, fiberglass bath fixtures, interior passage doors, exterior graphics, and slotwall panels and components. The Company also distributes drywall and drywall finishing products, electronics, wiring, electrical and plumbing products, cement siding, interior passage doors, roofing products, laminate and ceramic flooring, shower doors, furniture, fireplaces and surrounds, interior and exterior lighting products, and other miscellaneous products.