PHOTO COURTESY PATRICK INDUSTRIESMarine and RV components manufacturer Patrick Industries yesterday released its financial results for the second quarter.
Net sales increased 10% to $1.02 billion, largely driven by a 17% increase in RV revenue, an 11% increase in the housing unit and the acquisition of Sportech, a manufacturer of components for powersports OEMs.
Operating margin increased 10 basis points to 8.3% during the quarter. Net income increased 13% to $48 million. Adjusted EBITDA increased 14% to $130 million; adjusted EBITDA margin increased 40 basis points to 12.8%.
The increases were offset by a 30% decline in marine-segment revenue to $158 million, which represented 16% of overall quarterly revenues. The decline, according to a statement, was largely due to a 27% decrease in estimated wholesale powerboat industry shipments. Estimated content per wholesale powerboat unit decreased 10% to $3,935.
“Our solid revenue and operating margin improvement in the second quarter reflect the strategic diversification investments we have made over the last several years, as well as our cost-management initiatives and capital expenditures related to automation projects,” CEO Andy Nemeth said in the statement. “I am proud of how hard the Patrick team worked in the first half of the year to leverage our variable cost structure and execute operational efficiencies during a time when market and macroeconomic conditions have been so volatile.”
Cash flow provided by operations was $173 million for the first six months of the year, compared with $178 million in the same period last year. Free cash flow, on a trailing 12-month basis, was $348 million.
Nemeth said he is optimistic about the outlook for the remainder of the year.
“We believe Patrick’s profitable growth prospects and earnings power remain substantial and expect continued market share gains and strategic acquisitions to enhance our performance when our end markets recover. Our investments in our business and team and resulting solid financial performance, coupled with our strong balance sheet, have positioned our team to maintain an offensive stance in these volatile markets. With our net leverage ratio nearing our target range and available liquidity of $519 million, we remain positioned to actively engage potential acquisition candidates from within our robust pipeline and serve our customers at the highest level.”
