Patrick Industries, Inc. Reports Second Quarter 2021 Financial Results
Patrick Industries, Inc., 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.
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.”
For the full second quarter results, click here.
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.
Julie Ann Kotowski – Investor Relations – firstname.lastname@example.org – (574) 294-7511
Source: Patrick Industries, Inc.