Elkhart, Ind.-based supplier Patrick Industries Inc. today (April 27) reported double-digit gains in revenue and net income for its first quarter, buoyed by performance in its RV segment.
Net sales increased $66.8 million, or 24%, to $345.4 million from $278.6 million in the same quarter of 2016. The increase was primarily attributable to a 21% increase in the company’s revenue from the RV industry, which primarily reflected the incremental contribution from acquisitions completed in 2016 and industry growth.
For the first quarter of 2017, Patrick reported operating income of $23.9 million, an increase of 16% or $3.3 million, from the $20.6 million reported in the first quarter of 2016. Net income in the first quarter increased 35% to $17.5 million from $13 million in the first quarter of 2016, while net income per diluted share increased 32% to $1.12 from 85 cents.
The company’s RV content per unit (on a trailing 12-month basis) for the first quarter increased approximately 14% to $2,167 from $1,904 for the first quarter of 2016.
President and CEO Todd Cleveland noted, “We are pleased with our first quarter revenue performance and profitability, which are a result of the continued execution of our strategic and operational initiatives and reflect a strong start to the year in the markets we serve. Manufacturer and dealer sentiment remains positive as we head into the second quarter and the height of the selling season in anticipation of strong retail traffic on dealer lots and expected continued year-over-year growth. Additionally, the MH industry continues to gain strength along with optimism in the residential housing markets, and both our MH and industrial businesses are outperforming their respective markets.”
Patrick invested approximately $14 million, in the aggregate, for acquisitions and capital expenditures in the first quarter. As previously announced, on March 14, the company completed a public offering of 1.35 million shares of its common stock at a price of $73 per share. The net proceeds of the offering were used to immediately pay down a portion of the company’s outstanding indebtedness.
Total debt, net of cash on hand, decreased $65.1 million to $201 million at March 26 from $266.1 million at Dec. 31, 2016. As previously announced, in the first quarter of 2017, the company entered into a third amendment to its credit agreement to expand its credit facility to $450 million from $360 million and extend its maturity to March 2022.
“The capital capacity and flexibility provided by both the equity offering and the expansion of the credit facility position us with the dry powder to execute on our long-term strategic growth initiatives and capital allocation strategy as currently planned,”stated President Andy Nemeth. “We very quickly put some of this capital to use with our most recent acquisition of Medallion Plastics Inc. in late March 2017, which added additional high quality product lines and team members to our stable allowing us to bring additional value to our customers and increase our RV content per unit. In addition, we continue to pursue other opportunities to leverage our resources and further drive the business model including acquisitions, expansions, and capital expenditures.”
Patrick’s total assets increased $67.7 million to $602.7 million at March 26 from $535 million at Dec. 31, 2016, primarily reflecting seasonality, overall growth, and the addition of acquisition-related assets.
“In anticipation of continued growth in all three of our end markets, we continue to be optimistic about the opportunities to strategically grow our business and execute on our capital allocation strategy, gain market share, expand operations in targeted regional territories, and drive shareholder value, ” Cleveland further stated. “We have made investments in leadership talent, engagement and retention, capital equipment and facilities that are focused on strategically and structurally positioning ourselves with the foundation for the next phase of the company’s growth model. As we look toward the rest of the year, we expect to continue to put capital to use and make targeted capital investments to support our new business initiatives and maintain our balanced approach to leveraging our operating platform with the goal of broadening our sales and innovation efforts, introducing new products and product line extensions, and executing on our organic and acquisition-related objectives.”
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