Patrick Industries Announces All-Stock Merger With LCI Industries
The manufacturer reported net sales of $1.04 billion for the second quarter, a slight decline from the prior year.
Patrick Industries (PATK), the manufacturer of specialty components for the recreational vehicle and housing markets, reported second-quarter net sales of $1.04 billion. The result represented a decline of less than 1% compared to the $1.05 billion recorded in the second quarter of 2024.
The quarter was marked by a definitive agreement to combine with LCI Industries in an all-stock merger announced on June 30, 2024.
Net income rose 34% to $43 million from $32 million in the prior-year period. However, adjusted net income fell to $44 million from $51 million. Profitability metrics compressed, as operating margin declined to 7.4% from 8.3%. Adjusted EBITDA fell to $126 million from $135 million, with the adjusted EBITDA margin dropping to 12.1% from 12.9%.
Performance diverged across the company's primary end markets. Revenue from the RV sector decreased 15% YoY, following a 16% decline in RV industry wholesale unit shipments. Despite the volume drop, trailing 12-month content per unit increased 7% to $5,303.
Growth in other segments offset some of the RV weakness. Marine revenue increased 22% YoY, while trailing 12-month content per unit grew 22% to $4,883, a 5% increase over the first quarter of 2024. Powersports revenue rose 28% YoY, driven by demand for utility-focused units and higher attachment rates for Sportech cab enclosure solutions. Housing revenue increased 2% YoY to $320 million, despite an 8% decrease in estimated wholesale manufactured housing industry unit shipments.
Cash flow from operating activities for the first six months of 2024 dropped to $69 million from $189 million in the prior-year period. Higher working capital investment in inventory for composite products caused the decline. Trailing twelve-month free cash flow declined to $128 million from $262 million.
Patrick Industries ended the quarter with total debt of approximately $1.4 billion and a total net leverage ratio of 3.0x.