Patrick Industries, Inc. Reports Third Quarter 2021 Financial Results

Patrick Industries, Inc. (“Patrick”), a leading component solutions provider for the RV, marine, manufactured housing (“MH”) and industrial markets reported financial results for the third quarter ended September 26, 2021.

Third Quarter 2021 Highlights (compared to Third Quarter 2020 unless otherwise noted)

– Net sales of $1.1 billion increased 51%, reflecting momentum in all end markets
– Operating income of $93.3 million increased 56%
– Operating margin of 8.8% increased 30 basis points
– Net income of $57.4 million increased 54%
– Diluted earnings per share of $2.45 increased 51%
– Operating cash flows of $68.7 million
– Acquisitions of Coyote Manufacturing and Tumacs Covers

Net sales in the third quarter of 2021 increased $359.5 million, or 51%, to $1.1 billion from $700.7 million in the third quarter of 2020. The increase reflects continued strong performance in our RV and marine leisure lifestyle markets as well as the MH and industrial end markets.

Operating income of $93.3 million increased $33.5 million, or 56%, from $59.8 million in the third quarter of 2020. Operating margin of 8.8% in the third quarter of 2021 increased 30 basis points compared to 8.5% in the same period a year ago.

Net income was $57.4 million, an increase of 54% compared to $37.3 million in the third quarter of 2020. Diluted earnings per share was $2.45, an increase of 51% for the third quarter of 2021 compared to $1.62 for the third quarter of 2020.

“Market conditions across our platform continue to reflect strong trends and expectations while providing good visibility into 2022,” said Andy Nemeth, Chief Executive Officer. “The talent, resilience, and creative initiatives of our team members, in combination with the partnership of our customers, helped us to successfully navigate an incredibly complex and dynamic supply chain environment. Retail demand for leisure lifestyle products remains high, and has resulted in decreasing dealer inventories and increasing OEM backlogs despite record industry production levels. At the same time, our sales to the housing and industrial markets continue to benefit from low dealer inventories, attractive financing rates and robust home improvement and remodel activity.”

Jeff Rodino, President, said, “During the quarter, we welcomed the Coyote Manufacturing and Tumacs Covers teams into the Patrick family, a continuation of our strategic expansion of our marine portfolio and custom marine solutions capabilities. Additionally, our focus on human capital is translating into investments in our people and the tools they need to create solutions and innovations for our customers, while at the same time we continue to invest in cultural initiatives that support the ongoing development of our team members.”

Third Quarter 2021 Revenue by Market Sector
(compared to Third Quarter 2020 unless otherwise noted)

RV (60% of Revenue)

Revenue of $633.2 million increased 50% while wholesale RV industry unit shipments increased 23%.

Content per wholesale RV unit (on a trailing twelve-month basis) increased 19% to $3,735.

Marine (16% of Revenue)

Revenue of $173.1 million increased 85% while estimated wholesale powerboat industry unit shipments increased 15%.

Estimated content per wholesale powerboat unit (on a trailing twelve-month basis) increased 66% to $3,166.

MH (13% of Revenue)

Revenue of $134.6 million increased 25% while estimated wholesale MH industry unit shipments increased 9%.

Estimated content per wholesale MH unit (on a trailing twelve-month basis) increased 10% to $4,961.

Industrial (11% of Revenue)

Revenue of $119.3 million increased 52% while housing starts increased 9%.

Balance Sheet, Cash Flow and Capital Allocation

Operating cash flow for the third quarter of 2021 of $68.7 million decreased 6% compared to $73.4 million in the third quarter of 2020, reflecting continued resource utilization and strategic investment in inventory in support of strong business activity and customer supply needs. Business acquisitions in the third quarter of 2021 totaled $43.5 million, including the previously announced acquisitions of Coyote Manufacturing, a leading designer, fabricator and manufacturer of a variety of steel and aluminum products primarily for the marine OEM market, and Tumacs Covers, a leading manufacturer of custom designed boat covers, canvas frames, and bimini tops, primarily serving marine OEMs and dealers. Capital expenditures in the third quarter of 2021 totaled $17.8 million, compared to $10.9 million in the third quarter of 2020, reflecting continued forward-looking investments in infrastructure and automation initiatives to better align resources for increased scalability and to support customer growth.

In alignment with our capital allocation strategy, we returned $16.8 million to shareholders in the third quarter of 2021, including $10.4 million through opportunistic repurchases of 129,000 shares and $6.4 million of dividends.

Our net debt at the end of the quarter was approximately $1.1 billion, resulting in a net leverage ratio of 2.2x (as calculated in accordance with our credit agreement). Available liquidity, comprised of borrowing availability under our credit facility and cash on hand, was approximately $454 million.

Business Outlook and Summary

“Retail and wholesale demand patterns and projections continue to point towards an extension of the RV, marine and MH dealer inventory replenishment cycle and the resulting OEM production requirements well into 2022, and likely into 2023,” said Mr. Nemeth. “We are heavily focused on automation and innovation opportunities and initiatives across our platform as we plan for fiscal 2022 and beyond to enhance and drive scalability, flexibility, efficiencies, and continuous improvement. Additionally, ongoing supply chain initiatives, supported by our strong liquidity and investments in technology, systems, and human capital, will continue to provide the opportunity to serve our customers as they flex their production models and work to replenish heavily depleted dealer lots and reduce record backlogs. We continue to maintain a patient, disciplined, and focused capital allocation strategy to further drive long-term value for our customers, shareholders, team members, partners, and the communities in which we operate.”

For the full third 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 11,000 employees and 160 businesses across the United States.

Source: Patrick Industries, Inc.