Elkhart, Ind.-based Patrick Industries Inc., a major manufacturer and distributor of building and component products for the recreational vehicle, manufactured housing and industrial markets, today (July 29) reported its financial results for the second quarter and six months ended June 26.
For the second quarter, Patrick reported net income of $3.7 million, or $0.36 per diluted share, on net sales of $82.6 million, compared to net income of $1.9 million, or $0.19 per diluted share, on net sales of $83.9 million in the second quarter of 2010.
Second quarter 2011 net income included the positive impact of a non-cash credit of $0.3 million or $0.03 per diluted share related to mark-to-market accounting for common stock warrants and a net gain on the sale of fixed assets and on the acquisition of a business of $0.2 million or $0.02 per diluted share, which were partially offset by a non-cash charge of $0.2 million or $0.02 per diluted share for the write-off of financing costs related to the refinancing of Patrick’s former credit facility. This compares to the same period of 2010 that included a non-cash credit of $0.3 million or $0.04 per diluted share related to stock warrant accounting.
The increase in net income primarily reflected improved profitability at one of the company’s Midwest manufacturing divisions that had underperformed in 2010 compared to historical levels, and an acquisition completed in the third quarter of 2010. The Midwest manufacturing division benefited from margin improvements and ongoing organizational and process changes that enhanced labor efficiencies, reduced scrap and returns, and increased material yields.
Net sales for the quarter decreased approximately $1.3 million or 1.5%, primarily reflecting the impact of softer than expected conditions in the MH industry. The company estimates that unit shipments in the MH industry, which represented 24% of the company’s second quarter sales, were down approximately 15% from the second quarter of 2010. According to industry associations, wholesale unit shipments in the RV industry, which represented 60% of the company’s sales in the quarter, increased approximately 4% in the second quarter of 2011 compared to the prior year period. The industrial market sector, which is tied to the residential housing market and accounted for 16% of the company’s second quarter 2011 sales, saw a 4% decrease in new housing starts in the quarter compared to the prior year.
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