NEWS IN FOCUS
Acquisitions, RV Revenue Lift Patrick’s 2Q Profit
Elkhart, Ind.-based Patrick Industries Inc. today (July 30) reported a 30.8% increase in net income for its second quarter compared to the same period last year, lifted by strong RV sales performance coupled with six RV-related acquisitions completed in 2014 and the first six months of 2015.
Revenue in the second quarter, ended June 28, increased $45.6 million, or 24.3%, to $233.5 million from $187.9 million in the same quarter of 2014. Patrick reported that RV sales grew 26% during the three-month period and represented 75% of the company’s second-quarter revenue.
Net income in the second quarter increased 30.8% to $12.1 million from $9.2 million in the second quarter of 2014, while net income per diluted share gained 36.8% to 78 cents from 57 cents. Patrick reported operating income of $20.4 million, an increase of $4.9 million or 31.3%, from $15.5 million a year ago.
Todd Cleveland, president and CEO, stated, “We are pleased with our operating and financial performance in the second quarter, reflecting continued positive momentum in the industries we serve, the impact of the acquisitions we have made over the past several years, and the team’s commitment to driving the execution of our strategic plan. We continue to increase overall content per unit in both the RV and MH industries through acquisitions and market share gains. In addition, our industrial team continues to increase its presence and territorial coverage, demonstrating its ability to grow revenue and capture market share as well.
While we have seen a shift in the RV industry toward entry-level and lower-priced units, which has nominally impacted content per unit growth, this mix shift primarily affects certain of our more commodity-based product lines, which generally carry lower gross margins. However, we are encouraged to see younger and first-time consumers entering the market, as indicated by this mix shift and supported by recent dealer surveys, thus broadening the market’s foundation and extending the opportunity for longer-term industry growth potential.”
For the six months, sales increased $98.9 million. or 27.6%, to $456.9 million from $358 million in the same period in 2014, including the impact of the acquisitions completed in 2014 and 2015. For the first six months of 2015, the company’s revenue from the RV industry, which represented 77% of its six-months sales, increased by 30%.
The Company’s RV content per unit (on a trailing twelve-month basis) for the second quarter of 2015 increased approximately 21% to $1,707 from $1,410 for the second quarter of 2014. The MH content per unit (on a trailing twelve-month basis) for the second quarter of 2015 increased approximately 13% to an estimated $1,797 from $1,592 for the second quarter of 2014.
For the first six months of 2015, Patrick reported operating income of $35.9 million, an increase of $8.6 million or 31.7%, from the $27.3 million reported in the first six months of 2014. Net income in the first six months of 2015 increased 31.6% to $21.2 million from $16.1 million in the first six months of 2014, while net income per diluted share increased 37.0% to $1.37 from $1.00.
Patrick’s total assets increased $75.2 million to $330.8 million at June 28, 2015. from $255.6 million at December 31, 2014, primarily reflecting seasonality, overall growth, and the addition of acquisition-related assets. Total debt outstanding at June 28 increased $48.9 million to $150 million compared to $101.1 million at December 31, 2014, reflecting the funding of the Better Way Products and Structural Composites of Indiana acquisitions, stock repurchases, working capital needs, and capital expenditures, net of debt reduction.
“Our first half revenue, operating income and net income performance, and our strong cash flows, have allowed us to continue to strengthen our balance sheet and utilize our leverage position in accordance with our capital allocation strategy to reinvest in our business through both acquisitions and capital expenditures,” stated Cleveland. “… In anticipation of the continued growth in all three of our end markets and with the dedication and support of our more than 3,400 team members, we intend to continue to pursue acquisitions and other opportunities to increase our revenues and grow our operating income, net income, cash flows, and earnings per share through the remainder of 2015 and into 2016.”
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