Patrick Industries Reporting Improved Results
Patrick Industries Inc., a major manufacturer and distributor of building and component products for the recreational vehicle, manufactured housing and industrial markets, today (March 1) reported its financial results for the fourth quarter and 12 months ended Dec. 31, 2010.
For the fourth quarter of 2010, Patrick reported an increase in net sales of approximately $4.7 million or 8.8%, to $58.1 million from $53.4 million in the 2009 period, primarily as a result of increased shipments in the RV industry and the impact of two acquisitions completed during the year, the company reported.
According to industry associations, wholesale unit shipments in the RV industry, which represented approximately 56% of the company’s sales in the quarter, increased 9% in the fourth quarter of 2010 compared to the prior year period. The MH industry, which represented approximately 29% of the company’s fourth quarter sales, experienced continued softness with unit shipments declining 16% from the fourth quarter of 2009. The company’s sales to the industrial market sector, which is tied to the residential housing market, were up slightly quarter over quarter, and accounted for approximately 15% of the Company’s fourth quarter 2010 sales.
The company reported a net loss of $900,000 or 10 cents per share in the fourth quarter of 2010 compared to net income of $900,000 or 9 cents per share in 2009. The fourth quarter 2010 net loss included a non-cash credit of approximately $100,000 or 1 cent per share related to mark-to-market accounting for common stock warrants. Fourth quarter 2009 net income included a net gain on the sale of fixed assets of approximately $1.2 million or 12 cents per share and a non-cash credit of approximately $500,000 or 5 cents per share related to stock warrant accounting.
“Although our sales increased approximately 9% in the fourth quarter over the prior year, our gross margin decreased to 9.7% from 10.8% in the 2009 quarter, reflecting increases in certain raw material prices and some production inefficiencies at one of our significant manufacturing operating units that we are in the process of resolving. Over the past several months, we have made a number of organizational changes and process and pricing improvements to enhance profitability at this facility,” said Todd Cleveland, president and CEO.
For the 12 months of 2010, net sales increased 30.9% to $278.2 million from $212.5 million in 2009. The RV industry, which represented approximately 58% of the company’s sales in 2010, saw wholesale unit shipments increase 46% when compared to the prior year. Shipments in the MH industry, which represented approximately 28% of sales in 2010, were up approximately 0.4% from 2009. The industrial market sector, which accounted for approximately 14% of the company’s full year 2010 sales, saw an increase in new housing starts of approximately 6% for the 12 months of 2010 when compared to the prior year.
Patrick reported net income of $1.2 million or 12 cents per share for the 2010 year reflecting an increase of $5.7 million or 61 cents per share, over the net loss of $4.5 million or 49 cents per share in 2009. Full year 2010 net income included a net gain on the sale of fixed assets of approximately $2.9 million or 29 cents per share which reflected the sale of the company’s Oregon and California facilities, and a non-cash credit of approximately $300,000 or 3 cents per share related to stock warrant accounting.
The full year 2009 net loss included the impact of a net gain on the sale of fixed assets of approximately $1.2 million or 13 cents per share, and the positive impact of income from discontinued operations of approximately $900,000 or 12 cents per share, which was partially offset by a non-cash charge of approximately $800,000 or 9 cents per share related to stock warrant accounting.
In 2010, the company paid down approximately $12.5 million in principal on its long-term debt. The net debt payments were funded by a combination of net proceeds from the sales of the California and Oregon facilities in the first quarter of 2010, and by utilizing cash on hand.
As previously announced, the company’s existing senior debt facility was extended to May 31, 2011, to allow sufficient time to put in place a new facility to meet both short-term and long-term operating needs. In addition, capital expenditures were $1.4 million for the full year 2010 compared to $300,000 in 2009. At Dec. 31, 2010, the company had a federal net operating loss carryforward of approximately $29.9 million that will begin to expire in 2027.
“Overall, we are pleased with the improved profitability in 2010 versus 2009 (excluding the gains on the sale of fixed assets in both periods) as our sales increased approximately 31% and we were able to keep our fixed costs stable over a larger sales base. Our growth during this past year was largely attributable to improved conditions in the RV market, capturing market share, and the impact of acquisitions. Our attention was also focused on improving all phases of our manufacturing and distribution processes where warranted, and controlling our manufacturing and overhead expenses in all of our operating units,” Cleveland stated.
“As we move through 2011 with the expectation of continued improving market conditions primarily in the RV industry, we will remain focused on gaining market share, new product introductions and product line extensions, strategic acquisitions in our existing businesses and similar markets, and increasing brand recognition. In addition, we will look to continue to pay down debt, renew or replace our current credit facility, and develop our employee base. A focused ‘Customer First’ performance oriented culture remains at the forefront of our organizational strategic agenda in 2011 and beyond.”