Patrick Industries(US:PATK)2024-08-08 12:05Sales Performance - Net sales in Q2 2024 increased by $95.9 million, or 10%, to $1.02 billion compared to $920.7 million in Q2 2023, driven by higher wholesale unit shipments in the RV and housing markets [81]. - RV industry sales increased by $66.2 million, or 17%, in Q2 2024 due to increased production by RV OEM customers [81]. - Marine market sales decreased by $68.7 million, or 30%, in Q2 2024, attributed to a 27% decline in wholesale shipments compared to the prior year [81]. - Powersports market sales surged by $67.4 million, or 185%, in Q2 2024, primarily due to the acquisition of Sportech [74]. - Manufactured Housing (MH) market sales rose by $30.6 million, or 21%, in Q2 2024, driven by a 19% increase in industry wholesale unit volumes [75]. - Net sales in the first six months of 2024 increased by $129.3 million, or 7%, to $1.95 billion from $1.82 billion in the first six months of 2023 [82]. Financial Performance - Operating income for Q2 2024 was $84.7 million, representing an increase of 12% compared to $75.6 million in Q2 2023 [80]. - Net income for Q2 2024 was $47.9 million, a 13% increase from $42.4 million in Q2 2023 [80]. - Gross profit increased by $21.3 million, or 10%, to $231.3 million in Q2 2024 compared to $210.0 million in the prior year period, maintaining a gross profit margin of 22.8% [86]. - Sales in the Manufacturing segment rose by $69.9 million, or 10%, to $774.2 million in Q2 2024, with RV end market sales increasing by 21% [97]. - Sales in the Distribution segment increased by $30.5 million, or 13%, to $265.2 million in Q2 2024, driven by a 24% increase in MH end market sales [100]. - Operating income increased by $9.1 million, or 12%, to $84.7 million in Q2 2024, with an operating margin of 8.3% [90]. - SG&A expenses rose by $5.1 million, or 6%, to $83.6 million in Q2 2024, but decreased as a percentage of net sales to 8.2% from 8.5% [88]. - Interest expense increased by $2.0 million, or 11%, to $20.3 million in Q2 2024, reflecting higher debt levels and interest rates [91]. - Amortization of intangible assets increased by $4.5 million, or 22%, to $24.3 million in Q2 2024, primarily due to the Sportech acquisition [89]. - For the first six months of 2024, gross profit increased by $31.9 million, or 8%, to $436.1 million compared to $404.2 million in the prior year period [86]. Cash Flow and Liquidity - Net cash provided by operating activities was $172.7 million in the first six months of 2024, a decrease from $178.4 million in the same period of 2023 [108]. - Net cash used in investing activities increased to $386.8 million in the first six months of 2024, primarily due to business acquisitions totaling $330.7 million [109]. - Net cash provided by financing activities was $246.7 million in the first six months of 2024, compared to a cash outflow of $101.7 million in the same period of 2023 [110]. - As of June 30, 2024, the company had cash and cash equivalents of $44.0 million and $475.0 million available under the 2021 Credit Facility [103]. - The company was in compliance with financial covenants, with a consolidated secured net leverage ratio of 0.77 against a required maximum of 2.75 [107]. - The consolidated fixed charge coverage ratio was 3.34, exceeding the required minimum of 1.50 [107]. - A 100-basis point increase in SOFR would result in an additional annual interest cost of approximately $4.2 million based on $420.6 million of variable rate borrowings [117]. - The company utilized available borrowing capacity to fund the acquisition of Sportech in January 2024 [106]. - Working capital requirements are influenced by manufacturing volumes and customer payment cycles, which can vary significantly [104]. - The company continues to assess its liquidity position and potential sources of supplemental liquidity based on operating performance and market conditions [106]. Cost Management - Cost of goods sold in Q2 2024 increased by $74.6 million, or 10%, to $785.3 million, maintaining a flat percentage of net sales at 77.2% [84]. - The Company reported a decrease in cost of goods sold as a percentage of net sales by 20 basis points for the first six months of 2024 [85]. - Net sales attributable to acquisitions completed in the first six months of 2024 were approximately $137.7 million [97].