Patrick Industries Inc. reported that net sales for the fourth quarter of 2019 increased $18.3 million, or 3%, to $549.5 million from $531.2 million in the same quarter of 2018. The increase in the fourth quarter was primarily attributable to industry growth in its housing and industrial markets, acquisitions, and market share gains, and was partially offset by wholesale unit shipment declines in the RV and marine markets.
Patrick reported fourth-quarter operating income of $36 million, a decrease of 7%, or $2.9 million, from $38.9 million reported in the fourth quarter of 2018. Net income in the fourth quarter of 2019 was $20 million, or 86 cents per diluted share, compared to $27 million, or $1.15 per share in the fourth quarter of 2018. Fourth quarter 2018 net income included tax benefits associated with share-based compensation of $4.5 million, or 19 centsper diluted share, with no comparable amount for the fourth quarter of 2019.
RV industry revenues represented 54% of fourth-quarter sales and decreased 4% from the fourth quarter of 2018, compared to an 8% decrease in RV industry wholesale unit shipments
Andy Nemeth, president and CEO, stated, “We are pleased with our fourth quarter and full year performance, especially in light of the volatility experienced in all of our primary markets. Our team’s efforts reflect tremendous focus on executing on strategic initiatives across all of our end markets, driving operational efficiencies and cost reductions to optimize and position our cost structure for 2020, leveraging synergies from new acquisitions and across our business units, and delivering market share gains. While our leisure lifestyle markets, comprised of RV and marine, continued to feel the impact of reductions in wholesale unit production levels to better align with retail demand, our housing and industrial markets exhibited positive momentum as we finished 2019.”
Sales for the full year increased 3% to $2.34 billion from $2.26 billion in 2018. The increase in 2019 was primarily attributable to acquisitions and market share gains, which were partially offset by industry declines in three of the four primary markets served.
Patrick reported operating income of $154.4 million, a decrease of 13%, or $24 million, from $178.4 million reported in 2018. Net income in 2019 was $89.6 million, or $3.85 per diluted share, compared to $119.8 million, or $4.93 per share, in 2018. For 2018, net income included tax benefits associated with share-based compensation of $6.7 million, or 28 cents per diluted share. For 2019, there were $0.8 million of tax benefits associated with share-based compensation.
RV industry revenues represented 55% of 2019 sales, a 10% decrease from 2018, compared to a 16% decrease in RV industry wholesale unit shipments. RV content per wholesale unit for 2019 increased 7% to $3,170 from $2,965 for 2018.
“As we enter fiscal 2020 and beyond, we believe we are well-positioned to drive our business and strategic plan and execute off of our operational and financial platform,” Nemeth commented. “The capital capacity and flexibility provided by both the senior note offering and the amendment and maturity extension of our credit facility that we completed in the third quarter of 2019 position us with the dry powder to continue to execute on our long-term strategic growth initiatives and disciplined capital allocation strategy, which in the fourth quarter also included the payment of a $0.25 per share cash dividend to our shareholders.
“In addition, consistent with past practices, we intend to put our strong cash flows and financing platform to work and continue to invest in our overall business model and brands through acquisitions, share repurchases, strategic capital expenditures, and geographic and product line expansions to support our organizational strategic agenda. We look forward to continuing to deliver shareholder value with our ongoing focus on reinvesting in our businesses and communities, and engaging and developing the talent of our leaders and dedicated team members.”
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