Patrick Industries, Inc. Reports Fourth Quarter and Full Year 2012 Financial Results

 Patrick Industries, Inc. Reports Fourth Quarter and Full Year 2012 Financial
                                   Results

PR Newswire

ELKHART, Ind., Feb. 21, 2013

ELKHART, Ind., Feb. 21, 2013 /PRNewswire/ -- 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, 2012, including record net income for
the full year ended December 31, 2012. 

Fourth Quarter 2012 Financial Results

Net sales for the fourth quarter of 2012 increased $27.8 million or 35.6%, to
$106.1 million from $78.3 million in the same quarter of 2011. The increase
was primarily attributable to a 54% increase in the Company's revenue from the
RV industry, which represented approximately 68% of its fourth quarter 2012
sales. Approximately $21.1 million of the revenue increase was attributable
to the incremental impact of acquisitions completed in 2011 and 2012,
including related market share growth. The remaining $6.7 million of the
sales increase was primarily attributable to increased RV market penetration
and a 23% increase in quarterly wholesale unit shipments in the RV industry.
The MH industry, which represented 20% of the Company's fourth quarter sales,
saw wholesale unit shipments decline approximately 10% from the fourth quarter
of 2011. Sales to the industrial market sector, which is primarily tied to
the residential housing and commercial and retail fixture markets, accounted
for 12% of the Company's fourth quarter 2012 sales. The industrial market
reflected an approximate 36% increase in new housing starts in the quarter
compared to the prior year period. The Company's sales to the industrial
markets generally lag new housing starts by approximately six to nine
months.

The Company reported net income in the fourth quarter of 2012 of $3.2 million
or $0.30 per diluted share, compared to net income of $1.5 million or $0.14
per diluted share in the fourth quarter of 2011. Fourth quarter 2012 net
income was positively impacted by a non-cash income tax credit of $0.2 million
or $0.02 per diluted share as described below under the full year 2012
results. In addition, fourth quarter 2012 net income included a non-cash
charge of $0.7 million or $0.06 per diluted share for the write-off of the
remaining unamortized debt discount on the senior secured subordinated notes
(the "Notes") that were prepaid in full during the fourth quarter of 2012, and
a charge of $0.3 million or $0.02 per diluted share for premiums paid in
conjunction with the prepayment of the Notes. Fourth quarter 2011 net income
included a non-cash charge of $0.8 million or $0.07 per diluted share related
to mark-to-market accounting for common stock warrants.

As previously announced, on October 24, 2012, the Company entered into a
five-year $80 million revolving secured senior credit facility, with an
additional $20 million of capacity if needed, that replaced the four-year $50
million asset-based revolving secured senior credit facility that was
established in March 2011. In addition, Patrick acquired Middlebury,
Indiana-based Middlebury Hardwood Products ("Middlebury Hardwoods") on October
26, 2012. Middlebury Hardwoods, a major manufacturer of hardwood cabinet
doors, components, fascia and other hardwood products for the RV, MH and
residential kitchen cabinet industries, was the Company's fourth acquisition
of the year following the acquisition of Decor Mfg. in March 2012, Gustafson
Lighting in July 2012, and Creative Wood Designs in September 2012.

"We are pleased by our fourth quarter revenue and profitability growth
compared to 2011 as we continue to realize the benefits of our strategic and
operational initiatives executed in 2011 and 2012. Our results are a
reflection of the tireless efforts of our team members who consistently
perform at the highest level and manufacture and distribute quality products
aimed to exceed our customers' expectations as part of our 'Customer 1st'
performance-oriented culture and mission," said Todd Cleveland, President and
Chief Executive Officer. "In addition, we believe the newest member of our
Patrick family, Middlebury Hardwoods, and the other acquisitions we have
completed in the last two years will continue to bring new and innovative
products to our customers, provide positive contributions to our operating
profitability, and allow us to gain additional penetration in the RV, MH, and
industrial market sectors."

Full Year 2012 Results

Net sales for the twelve months of 2012 increased approximately $129.6 million
or 42.1%, to $437.4 million from $307.8 million in the same period in 2011.
The sales increase reflected a 59% increase in the Company's revenue from the
RV industry, which represented approximately 69% of its 2012 sales.
Approximately $66.6 million of the revenue improvement was attributable to the
incremental impact of business acquisitions completed in 2011 and 2012,
including related market share growth. The Company's sales also benefited
from a 13% increase in wholesale unit shipments in the RV industry, and
improved retail fixture and residential furniture sales in the industrial
market. Additionally, revenues from the MH industry, which represented 19% of
the Company's 2012 sales, rose 16% compared to the prior year as wholesale
unit shipments increased by approximately 6%. The industrial market sector,
which accounted for 12% of the Company's 2012 sales, saw new housing starts
increase by approximately 28% for 2012 compared to the prior year.

For the full year 2012, Patrick reported net income and diluted earnings per
share of $28.1 million and $2.64, respectively, the highest in the Company's
history, compared to net income of $8.5 million or $0.83 per diluted share in
the same period in 2011. Twelve months 2012 net income was positively
impacted by a net gain on the sale of fixed assets and on the acquisition of a
business of $0.2 million or $0.02 per diluted share, and a non-cash income tax
credit of $6.8 million or $0.64 per diluted share as described below. Full
year 2012 net income was reduced by a non-cash charge of $1.7 million or $0.16
per diluted share related to stock warrant accounting, a non-cash charge of
$0.7 million or $0.06 per diluted share for the write-off of the remaining
unamortized debt discount on the prepayment of the Notes, and a charge of $0.3
million or $0.02 per diluted share for the premiums paid in conjunction with
the prepayment of the Notes as described above.

The Company maintained a full valuation allowance against its net deferred tax
assets at December 31, 2011. As the Company has generated taxable income in
2012 and expects this to continue, the entire valuation allowance has been
reversed during 2012 resulting in an income tax credit as mentioned above.
Beginning in the first quarter of 2013, the Company expects to reflect income
taxes at an effective rate of approximately 39%.

The Company's federal net operating tax loss carryforward of approximately
$21.0 million at December 31, 2011 exceeded its taxable income for 2012.The
Company expects to utilize the remaining federal net operating tax loss
carryforward, which has been recorded as a deferred tax asset at December 31,
2012, by the second quarter of 2013.

Exclusive of the income tax credit mentioned above and assuming the Company
had been taxed at statutory tax rates, full year 2012 would still have
resulted in the highest net income in the Company's history.

Full year 2011 net income included non-cash charges related to the refinancing
of Patrick's previous credit facility that was established in 2007, including
$0.6 million or $0.06 per diluted share for the write-off of the remaining
unamortized loss on interest rate swaps that were terminated and paid off
during the first quarter of 2011, and the write-off of $0.6 million or $0.06
per diluted share of financing costs, as well as a non-cash charge of
approximately $0.7 million or $0.07 per diluted share related to stock warrant
accounting. The non-cash charges were partially offset by a net gain on the
sale of fixed assets and on the acquisition of a business of $0.2 million or
$0.02 per diluted share.

"We are both excited and energized by our full year 2012 performance as we
have successfully executed on a number of strategic and operational
initiatives over the past two years," stated Mr. Cleveland. "In 2012, as part
of our overall strategic plan, we invested over $29 million in four
acquisitions which included the purchase of two operating facilities, entered
into a new five-year credit facility, and expanded the depth and breadth of
our product lines and capabilities, both in our core markets and in related
markets. These four acquisitions had annualized revenues of approximately $80
million, of which approximately $29 million was included in our full year 2012
operating results."

"Additionally, in 2012 we were able to successfully integrate the businesses
we acquired within the last two years to utilize our manufacturing and
distribution capabilities to grow our revenue base and to grow our net income
and earnings per share to record levels while also increasing our market share
and per unit content within the RV industry. We also re-invested
approximately $8.0 million into our businesses through capital expenditures,
which included the replacement of our current management information systems,
the acquisition of a building in the Midwest to increase capacity to support
the growth in one of our manufacturing divisions, and the replacement and
upgrade of existing production equipment at several of our manufacturing
operations," Mr. Cleveland further stated.

An increase in Patrick's total assets, which approximated $143.5 million at
December 31, 2012 compared to $85.8 million at December 31, 2011, primarily
reflected the impact of acquisitions and overall growth from year to year.
Furthermore, total debt outstanding at December 31, 2012 increased to $49.7
million compared to $33.0 million at December 31, 2011 reflecting the funding
of acquisitions completed during the year net of debt reduction.

"As we begin a new year in 2013, we believe the investments we made in our
businesses in 2011 and 2012 will positively impact both our top and bottom
line results," said Mr. Cleveland. "In conjunction with the support of our
new credit facility, our organizational strategic agenda, and the dedication
and creativity of our more than 1,700 team members, we will continue to focus
our efforts on the addition of new product lines and strategic acquisitions
that will bring value to our customers in terms of innovation, price,
flexibility and creativity both in the short-term and on a long-term basis."

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, household
furniture, fixtures and commercial furnishings, marine, and other industrial
markets and operates coast-to-coast through locations in 11 states. Patrick's
major manufactured products include decorative vinyl and paper laminated
panels, countertops, wrapped profile mouldings, slide out trim and fascia,
cabinet doors and components, hardwood furniture, interior passage doors,
exterior graphics, and slotwall panels and components. The Company also
distributes drywall and drywall finishing products, electronics, wiring,
electrical and plumbing products, cement siding, interior passage doors,
roofing products, laminate and ceramic flooring, shower doors, furniture,
fireplaces and surrounds, interior and exterior lighting products, and other
miscellaneous products.

Forward-Looking Statements

This press release contains certain statements related to future results, or
states our intentions, beliefs and expectations or predictions for the future,
which are forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
involve a number of risks and uncertainties that could cause actual results to
differ materially from either historical or anticipated results depending on a
variety of factors. Potential factors that could impact results include: the
impact of any economic downturns especially in the residential housing market,
pricing pressures due to competition, costs and availability of raw materials,
availability of commercial credit, availability of retail and wholesale
financing for residential and manufactured homes, availability and costs of
labor, inventory levels of retailers and manufacturers, levels of repossessed
residential and manufactured homes, the financial condition of our customers,
retention and concentration of significant customers, the ability to generate
cash flow or obtain financing to fund growth, future growth rates in the
Company's core businesses, the ability to effectively manage the costs and the
implementation of the new enterprise resource management system, the
successful integration of recent acquisitions, interest rates, oil and
gasoline prices, the outcome of litigation, adverse weather conditions
impacting retail sales, and our ability to remain in compliance with our
credit agreement covenants. In addition, national and regional economic
conditions and consumer confidence may affect the retail sale of recreational
vehicles and residential and manufactured homes. The Company does not
undertake to update forward-looking statements, except as required by law.
Further information regarding these and other risks, uncertainties and factors
is contained in the section entitled "Risk Factors" in the Company's Annual
Report on Form 10-K for the year ended December 31, 2011, and in the Company's
Form 10-Qs for subsequent quarterly periods, which are filed with the
Securities and Exchange Commission ("SEC") and are available on the SEC's
website at www.sec.gov.





                                                                 FOURTH QUARTER      TWELVE MONTHS
(thousands except per share data)
                                                                 ENDED               ENDED
                                                                 Dec. 31,  Dec.      Dec. 31,    Dec. 31,
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)                          31,
                                                                 2012               2012       2011
                                                                           2011
NET SALES                                                        $         $         $           $
                                                                 106,128  78,278   437,367    307,822
Cost of goods sold                                               91,560    67,068    371,623     263,514
Gross profit                                               14,568    11,210    65,744      44,308
Operating expenses:
 Warehouse and delivery                                       4,041     3,490     15,782      13,645
 Selling, general and administrative                          5,381     4,446     21,637      16,603
 Amortization of intangible assets                            531       291       1,523       829
 Gain (loss) on sale of fixed assets and acquisition of       (1)       19        (238)       (244)
business
 Total operating expenses                                 9,952     8,246     38,704      30,833
OPERATING INCOME                                                 4,616     2,964     27,040      13,475
 Stock warrants revaluation                               -         775       1,731       699
 Interest expense, net                                    1,572     880       4,037       4,469
Income before income tax credit                                  3,044     1,309     21,272      8,307
 Income tax credit                                        (173)     (163)     (6,823)     (163)
NET INCOME                                                       $       $        $          $  
                                                                 3,217     1,472     28,095      8,470
BASIC NET INCOME PER COMMON SHARE                                $      $       $        $   
                                                                 0.30      0.15      2.66        0.87
DILUTED NET INCOME PER COMMON SHARE                              $      $       $        $   
                                                                 0.30      0.14      2.64        0.83
Weighted average shares outstanding – Basic                      10,809    10,006    10,558      9,757
 10,891    10,472    10,637      10,156
Diluted





(thousands)
CONDENSED CONSOLIDATED STATEMENTS OF          Dec. 31,           Dec. 31,
FINANCIAL POSITION
                                              2012               2011
                                              (Unaudited)
CURRENT ASSETS
 Cash and cash equivalents                   $     434      $    550
 Trade receivables, net                      17,858             14,171
 Inventories                                 46,992             27,503
 Deferred tax assets                         5,149              -
 Prepaid expenses and other                  3,237              2,161
 Total current assets                   73,670             44,385
Property, plant and equipment, net            37,069             22,978
Goodwill and other intangible assets, net     29,581             15,834
Deferred tax assets, net of valuation         676                -
allowance
Deferred financing costs, net                 1,612              1,898
Other non-current assets                      861                675
 TOTAL ASSETS                            $  143,469        $  85,770
CURRENT LIABILITIES
 Current maturities of long-term debt        $        -  $   1,000
 Accounts payable                            17,336             10,618
 Accrued liabilities                         11,816             8,232
 Total current liabilities               29,152             19,850
Long-term debt, less current maturities and   49,716             31,954
discount
Deferred compensation and other               3,193              3,780
Deferred tax liabilities                      -                  1,344
 TOTAL LIABILITIES                       82,061             56,928
SHAREHOLDERS' EQUITY                          61,408             28,842
 TOTAL LIABILITIES AND SHAREHOLDERS'     $  143,469        $  85,770
EQUITY



SOURCE Patrick Industries, Inc.

Website: http://www.patrickind.com
Contact: Julie Ann Kotowski, Patrick Industries, Inc., +1-574-294-7511,
kotowskj@patrickind.com
 
Press spacebar to pause and continue. Press esc to stop.