Patrick Industries reports 30% marine sales dip in Q2
Patrick Industries, Inc. recently reported financial results for the second quarter and six months ended June 30, 2024.
Net sales increased 10% to $1.02 billion, an increase of $96 million compared to the second quarter of 2023. The increase in sales was primarily driven by higher revenue from RV and Housing end markets combined with revenue from the company’s first quarter acquisition of Sportech, which more than offset lower revenue from Patrick’s Marine end market as a result of continued strict production discipline by marine OEMs in light of ongoing marine dealer inventory destocking.
Operating income of $85 million in the second quarter of 2024 increased $9 million, or 12%, compared to $76 million in the second quarter of 2023. Operating margin of 8.3% increased 10 basis points compared to 8.2% in the same period a year ago as a result of continued labor management and increased revenues. For the first six months of 2024 compared to the same period in 2023, excluding acquisition transaction costs and purchase accounting adjustments in both periods, adjusted operating margin improved 40 basis points to 7.7%. Net income increased 13% to $48 million compared to $42 million in the second quarter of 2023. Diluted earnings per share of $2.16 increased 11% compared to $1.94 for the second quarter of 2023.
“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,” said Patrick Industries CEO Andy Nemeth. “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.”
Marine segment
Patrick Industries’ marine segment reported revenue of $158 million, a decrease of 30%, while estimated wholesale powerboat industry unit shipments decreased 27%. Estimated content per wholesale powerboat unit (on a trailing twelve-month basis) decreased 10% to $3,935. Compared to the first quarter of 2024, estimated content per wholesale powerboat unit (on a trailing twelve-month basis) decreased 2%.
“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,” Nemeth said. “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. Demand in our end markets continues to hinge upon consumer confidence and interest rate relief, and our businesses and leaders will maintain our strong operating discipline and financial foundation and use this time to continue developing innovative products and solutions for our customers that will enable value creation for years to come. OEMs and dealers have maintained tremendous discipline with regards to inventory management, which is paramount to the long-term health of the end markets we serve. Our team will continue to focus on what we can control and managing our business and cost structure, as we remain nimble with an eye on driving long-term profitable organic growth, free cash flow, and shareholder value.”
Find the full Q2 2024 financial results on the Patrick Industries Investor Relations webpage.
