Patrick Industries, Inc. reported financial results for the third quarter and nine months ended Sept. 29.
Net sales increased 6% to $919 million, an increase of $53 million compared to the third quarter of 2023. The growth in net sales was due to a 13% increase in housing revenue coupled with revenue gains from its Sportech acquisition, which closed in January of this year. These factors more than offset a 21% decline in marine revenue as marine OEMs as well as OEMs across its other outdoor enthusiast markets continued to maintain highly disciplined production schedules in an effort to manage dealer inventory in alignment with current end market demand.
Operating income of $74 million in the third quarter of 2024 increased $3 million, or 5%, compared to $71 million in the third quarter of 2023. Operating margin of 8.1% decreased 10 basis points compared to 8.2% in the same period a year ago, reflecting higher SG&A expenses and amortization costs related to acquisitions. For the first nine 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 20 basis points to 7.8%.
Net income increased 3% to $41 million, compared to $40 million in the third quarter of 2023. Diluted earnings per share of $1.80 in the third quarter of 2024 included approximately $0.06 of dilution from the company’s convertible notes and related warrants. There was no dilutive impact from the convertible notes in the third quarter of 2023. For the first nine months of 2024 compared to the first nine months of 2023, excluding acquisition transaction costs and purchase accounting adjustments in both periods, adjusted net income increased 14% to $128 million and adjusted diluted earnings per share increased 13% to $5.75. Diluted earnings per share for the first nine months of 2024 included approximately $0.10 of dilution from its 2028 convertible notes and related warrants. The prior year period included approximately $0.05 of dilution related to our 1.00% Convertible Senior Notes due 2023, which were repaid in cash in February 2023.
“The Patrick team delivered another quarter of solid results with revenue and net income growth supported by the continued diversification of our business,” said Andy Nemeth, Chief Executive Officer. “The resilience of our model is directly related to the dedication and talent of our incredible team members, and the strategic investments we have made enabling Patrick to perform well during a prolonged period of inventory destocking that has continued to affect our Outdoor Enthusiast end markets at different times over the last two years.”
Jeff Rodino, President — RV, said, “This quarter, we welcomed RecPro into our family of brands, which meaningfully expands our position in the direct-to-consumer RV and enthusiast aftermarket. We are energized by the depth and breadth of their product offering, the synergies across our business, and their tremendous leadership and expertise in e-commerce and aftermarket sales. We believe RecPro’s efficient distribution channel and significant consumer reach will substantially enhance our ability to provide Patrick’s valuable aftermarket solutions across all of our end markets.”
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