The Recreation Vehicle Industry Association commissioned an Economic Impact Study on the RV industry, released on June 7, 2016. The study found that the RV industry contributes about $49.7 billion in economic output or 0.28 percent of the Gross Domestic Product. Through its production and distribution linkages, the industry impacts firms in 426 of the 440 sectors of the United States economy.
Nationwide, the industry is responsible for 216,170 jobs, both directly and inderectly, creating an economic impact of $37.5 billion. The full study results, along with each individual state and congressional district's economic impact is available on the website by clicking here .
Thu Apr 27, 2017
ELKHART, Indiana - Patrick Industries, Inc. has reported an increase of 24 percent for the first quarter ended March 26.
Net sales for the first quarter of 2017 increased $66.8 million or 24 percent, to $345.4 million from $278.6 million in the same quarter of 2016. The increase was primarily attributable to a 21 percent increase in the company's revenue from the RV industry, which primarily reflected the incremental contribution from acquisitions completed in 2016 and industry growth. According to industry sources, RV industry wholesale unit shipments increased about 12 percent in the first quarter of 2017 compared to the prior year.
Sales to the RV industry represented 76 percent of the company's first quarter 2017 sales. Revenue from the MH industry, which represented 13 percent of the company's first quarter 2017 sales, increased 36 percent. The company estimates that wholesale unit shipments in the MH industry rose about 20 percent from the first quarter of 2016. Additionally, sales to the industrial markets increased 35 percent compared to the prior year period. The industrial market sector, which is tied primarily to residential housing and non-residential construction spending, accounted for 11 percent of the company's first quarter 2017 sales.
According to industry sources, new housing starts in the first quarter of 2017 increased about 8 percent compared to the prior year. The company estimates that about 54 percent of its industrial market sales are linked to the residential housing sector and its sales to the industrial markets generally lag new housing starts by about six to nine months.
The company's RV content per unit (on a trailing 12-month basis) for the first quarter of 2017 increased about 14 percent to $2,167 from $1,904 for the first quarter of 2016. The MH content per unit (on a trailing 12-month basis) for the first quarter of 2017 increased about 14 percent to an estimated $2,044 from $1,787 for the first quarter of 2016.
For the first quarter of 2017, Patrick reported operating income of $23.9 million, an increase of 16 percent or $3.3 million, from the $20.6 million reported in the first quarter of 2016. Net income in the first quarter of 2017 increased 35 percent to $17.5 million from $13 million in the first quarter of 2016, while net income per diluted share increased 32 percent to $1.12 from $0.85.
In the fourth quarter of 2016, the company adopted a new accounting standard related to employee share-based payments that requires tax benefits resulting from the vesting or exercise of such payments be recognized in the company's income tax provision rather than in additional paid-in capital. Adoption of the new standard required a retroactive adjustment to the company's income tax provision previously reported for the first quarter of 2016. As a result of this adjustment, the company's first quarter 2016 net income and net income per diluted share were increased by $0.9 million and $0.05 per share, respectively. In addition, adoption of this standard increased the company's first quarter 2017 net income and net income per diluted share by $3.7 million and $0.22 per share, respectively.
"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," Patrick CEO Todd Cleveland says. "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."
"Based on the most recently available data, RV retail sales of towable and motorized units, on a combined basis, grew 10 percent in the first two months of 2017 matching up well with recent historical seasonal trends and demand patterns," Patrick President Andy Nemeth says. "We continue to see strong demand in this market, supported by favorable demographic trends and consumer confidence and the continued popularity of the RV and recreational lifestyle, and we remain committed to focusing on positioning ourselves to be able to fully support our customer base with investments in new products and increased capacity. Additionally, we increased our overall content per unit in both the RV and MH industries and remain optimistic about the long-term growth potential in these industries as well as in the industrial and adjacent markets."
The company invested about $14 million, in the aggregate, for acquisitions and capital expenditures in the first quarter of 2017. 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," Nemeth says. "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 says. "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."