Patrick Industries (PATK) reported quarterly revenue of $575.14 and eps of $1.15. The company beat on revenue and earnings, yet the stock is down by over 6% post-earnings. Below are my takeaways on the quarter.
Organic Revenue Appears Strong
Patrick manufactures components, and distributes building products and materials to original equipment manufacturers (“OEMs”). The company’s four main product segments are Recreational Vehicle (“RV”), Marine, Manufactured Housing (“MH”) and Industrial. This quarter the company’s revenue grew by 41% Y/Y, and revenue growth was broad-based.
The RV segment represented 62% of total revenue, while Marine represented 14%. RV revenue was up 30% Y/Y despite a double-digit decline in wholesale RV shipments during the quarter. RV dealers built up inventory heading into the spring selling season in order to meet expected robust demand. That build up has created excess inventory on dealer lots, which likely triggered the recent decline in shipments. Lower shipments will likely lead to less sales Patrick’s supplies that go into RVs.
Marine sales more than doubled, supported by organic and strategic growth. Patrick sees Marine as a complement to the leisure family lifestyle model its RV segment fits into. In 2018 the company made five acquisitions in the Marine market. Sans acquisitions, Patrick’s estimated total organic growth in the quarter was 7%. Read more:
