ELKHART, Ind. -- Patrick Industries, Inc. (NASDAQ: PATK), a major manufacturer and distributor of building and component products for the recreational vehicle ("RV"), manufactured housing ("MH"), and industrial markets, today reported its financial results for the fourth quarter and full year ended December 31, 2014.

Fourth Quarter 2014 Financial Results

Net sales for the fourth quarter of 2014 increased $43.0 million or 29.3%, to $189.6 million from $146.6 million in the same quarter of 2013. Revenue from the RV industry, which represented 74% of the Company's fourth quarter 2014 sales, increased 36%. According to industry sources, RV industry wholesale unit shipments increased approximately 18% in the fourth quarter of 2014 compared to the fourth quarter of 2013. Revenue from the MH industry, which represented 16% of the Company's fourth quarter 2014 sales, increased 24%. According to industry sources, MH industry wholesale unit shipments rose approximately 8% from the fourth quarter of 2013. The industrial market sector, which is primarily tied to the residential housing and commercial and retail fixtures markets, accounted for 10% of the Company's fourth quarter 2014 sales. According to industry sources, new housing starts in the fourth quarter of 2014 compared to the prior year increased approximately 6%.

The Company estimates its organic growth in the fourth quarter of 2014 at approximately 13%, or $19.7 million, of its total revenue increase. The remaining $23.3 million of the revenue increase in the fourth quarter of 2014 reflects the contribution of the four acquisitions completed in 2014: Charleston Corporation ("Charleston") in November 2014; Precision Painting, Inc., Carrera Custom Painting, Inc., Millennium Paint, Inc., and TDM Transport, Inc. (collectively, "Precision") in June 2014; Foremost Fabricators, LLC in June 2014; and PolyDyn3 LLC in September 2014. In addition, as recently announced, the Company acquired the business and certain assets of Better Way Partners, LLC d/b/a Better Way Products ("Better Way") in February 2015.

Patrick reported operating income of $11.7 million in the fourth quarter of 2014, an increase of $3.1 million or 35.4%, from the $8.6 million reported in the fourth quarter of 2013. Fourth quarter 2014 net income was $7.3 million or $0.69 per diluted share, compared to net income of $5.0 million or $0.47 per diluted share, in the fourth quarter of 2013.

Full Year 2014 Financial Results

Net sales for the twelve months of 2014 increased $140.8 million or 23.7%, to $735.7 million from $594.9 million in 2013. Revenue from the RV industry, which represented 74% of 2014 sales, increased by 27% compared to the prior year as RV wholesale unit shipments increased by approximately 11%. Revenue from the MH industry, which represented 15% of 2014 sales, rose 13% compared to the prior year as MH wholesale unit shipments increased by approximately 7%. Revenue from the industrial markets, which accounted for 11% of 2014 sales, increased 16% compared to the prior year and benefited primarily from improved residential cabinet and office, medical, and institutional furnishings sales. New housing starts increased by approximately 9% for 2014 compared to the prior year. The Company estimates that approximately 56% of its industrial market sales are tied to the residential housing sector and its sales to the industrial markets generally lag new housing starts by approximately six to nine months.

The Company estimates its organic growth in 2014 at approximately 11%, or $62.8 million, of its total revenue increase. The remaining $78.0 million of the revenue increase in the twelve months of 2014 reflects the contribution of the 2014 acquisitions as well as the incremental contribution of acquisitions completed in 2013.

The Company's RV content per unit for the full year 2014 increased approximately 15% to $1,536 from $1,338 in 2013. The MH content per unit for 2014 increased approximately 7% to $1,692 from $1,582 in 2013.

For the full year 2014, Patrick reported operating income of $51.5 million, an increase of $10.5 million or 25.7%, from the $41.0 million reported in the prior year. Twelve months 2014 net income was $30.7 million or $2.87 per diluted share, compared to net income of $24.0 million or $2.23 per diluted share in 2013.

In the fourth quarter of 2014, the Company repurchased 172,021 shares of its common stock at an average price of $40.69 per share for a total cost of approximately $7.0 million. In the twelve months of 2014, the Company repurchased 344,750 shares at an average price of $40.40 per share for a total cost of approximately $13.9 million. In addition, in the first quarter of 2015 through February 16, 2015, the Company repurchased 130,500 shares at an average price of $43.29 per share for a total cost of approximately $5.7 million. Since the inception of the stock repurchase program in February 2013 through February 16, 2015, the Company has repurchased in the aggregate 882,580 shares at an average price of $29.07 per share for a total cost of approximately $25.7 million.

On February 17, 2015, the Company's Board of Directors authorized an increase in the amount of the Company's common stock that may be acquired under the stock buyback program over the next 12 months to $20.0 million.

Patrick's total assets increased $81.4 million to $255.6 million at December 31, 2014, from $174.2 million at December 31, 2013, primarily reflecting overall growth and the addition of acquisition-related assets. Total debt outstanding at December 31, 2014, increased $46.1 million to $101.1 million from $55.0 million at December 31, 2013, reflecting the funding of acquisitions, stock repurchases, and capital expenditures, net of debt reduction.

Todd Cleveland, President and Chief Executive Officer, said, "Our fourth quarter and full year 2014 revenue and profitability growth, coupled with the benefits realized from the achievement of our strategic and operational initiatives executed in 2013 and 2014 and the growth experienced in all three of the end markets we serve, resulted in a strong fiscal 2014 for Patrick Industries. Our team's focus on driving ourselves to exceed customer expectations, as well as on product development and the acquisition of related businesses and products, provided us with the opportunities to continue to better serve our customer base. Additionally, our dedication to our 'Customer First' performance-oriented culture, leadership development initiatives, and talent management processes, has been instrumental in delivering value-enhancing results for all of our key stakeholders."

Mr. Cleveland continued, "As we look forward to 2015, we are excited about the opportunities to further penetrate our markets, increase market share, and continue to grow our business. We are anticipating the continuation of steady growth in all three of our primary markets. In addition, we believe that the businesses we acquired in 2013 and 2014, as well as our most recent acquisition of Better Way, are well positioned to expand their customer set, enhance their brands, and grow profitably. With our organizational strategic agenda, the dedication and creativity of our over 3,200 team members, and the support of all our business partners, we look forward to delivering strategic, operational, and financial progress in 2015."

About Patrick Industries

Patrick Industries, Inc. (www.patrickind.com) is a major manufacturer of component products and distributor of building products serving the recreational vehicle, manufactured housing, kitchen cabinet, office and household furniture, fixtures and commercial furnishings, marine, and other industrial markets and operates coast-to-coast through locations in 10 states. Patrick's major manufactured products include decorative vinyl and paper laminated panels, countertops, fabricated aluminum products, wrapped profile mouldings, slide-out trim and fascia, cabinet doors and components, hardwood furniture, fiberglass bath fixtures, fiberglass and plastic component products, interior passage doors, exterior graphics and RV painting, simulated wood and stone products, and slotwall panels and components. The Company also distributes drywall and drywall finishing products, electronics, wiring, electrical and plumbing products, cement siding, FRP products, interior passage doors, roofing products, laminate and ceramic flooring, shower doors, furniture, fireplaces and surrounds, interior and exterior lighting products, and other miscellaneous products.

(thousands except per share data)

FOURTH QUARTER 

TWELVE MONTHS

ENDED

ENDED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Dec. 31,

Dec. 31,

 Dec. 31,

 Dec. 31,

(Unaudited)

2014

2013

2014

2013

NET SALES

$   189,574

$   146,612

$   735,717

$   594,931

Cost of goods sold

160,065

125,008

617,214

503,908

       Gross profit 

29,509

21,604

118,503

91,023

 Operating Expenses: 

     Warehouse and delivery 

6,550

5,619

26,163

20,158

     Selling, general and administrative 

9,758

6,568

36,362

27,979

     Amortization of intangible assets 

1,441

783

4,477

2,371

     (Gain) loss on sale of fixed assets  

57

(6)

30

(430)

           Total operating expenses 

17,806

12,964

67,032

50,078

 OPERATING INCOME  

11,703

8,640

51,471

40,945

     Interest expense, net 

643

556

2,393

2,171

 Income before income taxes 

11,060

8,084

49,078

38,774

     Income taxes

3,767

3,072

18,404

14,734

 NET INCOME  

$       7,293

$       5,012

$     30,674

$     24,040

 BASIC NET INCOME PER COMMON SHARE 

$         0.70

$         0.47

$         2.88

$         2.24

 DILUTED NET INCOME PER COMMON SHARE 

$         0.69

$         0.47

$         2.87

$         2.23

 Weighted average shares outstanding - Basic

10,474

10,656

10,634

10,733

                                                                - Diluted

10,543

10,710

10,693

10,786

 

(thousands)

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Dec. 31,

Dec. 31, 

(Unaudited)

2014

2013

CURRENT ASSETS

  Cash and cash equivalents

$         123

$              34

  Trade receivables, net 

32,637

22,644

  Inventories 

71,020

56,510

  Deferred tax assets 

4,563

3,762

  Prepaid expenses and other 

6,453

4,749

         Total current assets 

114,796

87,699

 Property, plant and equipment, net 

57,353

42,117

 Goodwill and other intangible assets, net 

81,174

42,106

 Deferred financing costs, net 

1,024

1,283

 Other non-current assets 

1,214

982

        TOTAL ASSETS

$    255,561

$    174,187

CURRENT LIABILITIES

    Accounts payable 

$      29,754

$      18,826

    Accrued liabilities 

15,388

13,585

        Total current liabilities 

45,142

32,411

 Long-term debt 

101,054

55,000

 Deferred compensation and other 

2,239

2,546

 Deferred tax liabilities 

4,358

1,920

        TOTAL LIABILITIES

152,793

91,877

 SHAREHOLDERS' EQUITY 

102,768

82,310

        TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$    255,561

$    174,187

 

SOURCE Patrick Industries, Inc.

Have something to say? Share your thoughts with us in the comments below.