Patrick Industries has reported financial results for the first quarter ended March 29, showing net sales of $589.2 million, a decrease of 3.1 percent over the same period last year. The company stated that it was primarily attributable to lost shipping days and business disruption in its end markets in late March related to the COVID-19 pandemic .
Patrick reported operating income of $39.3 million, an increase of 9.6 percent or $3.5 million, from $35.8 million reported in the first quarter of 2019. Net income in the first quarter of 2020 was $21.2 million compared to $20.8 million in the first quarter of 2019.
“Our first quarter results reflect both the momentum and positive traction experienced across all of our end markets in the first two months of the year, followed by business disruptions caused by the unprecedented and sudden COVID-19 pandemic, as many of our customers reduced production levels and purchases of our products which impacted our operations in late March,” said Andy Nemeth, president and CEO. “Despite the impact of COVID-19 on our business, we are encouraged by our first quarter performance and are exceptionally proud of our talented and dedicated team members who immediately adjusted to the rapidly changing environment.”
Revenues for the RV sector were $320.2 million, a decrease of 6 percent, compared to flat RV industry wholesale unit shipments for the quarter.
RV content per wholesale unit (on a trailing 12-month basis) decreased 1 percent to $3,112 from $3,131 for the first quarter of 2019.
“Additionally, the diversification of our end markets and geographic regions in which we operate have helped to lessen the impact of COVID-19 on our results, as certain plants in various parts of the country remained operational throughout March,” said Nemeth. “The actions that we have taken over the past twelve months have continued to drive operational efficiencies and further optimize our cost structure, including the $10 million annualized fixed cost reduction implemented in the third quarter of 2019. The integration of acquisitions and execution of synergies across our business units has also helped to partially offset the financial impacts of COVID-19 and position our organization to be nimble in the current environment.”
In order to prioritize the safety and well-being of Patrick team members, continue to balance production levels with customer demand, and comply with government mandates while maximizing cash flows and liquidity, the company temporarily suspended operations at certain facilities over the past five weeks and furloughed affected team members with benefits. Additionally, the company proactively took the following cost containment and financial management measures:
- Voluntary compensation reduction by the executive team
- Voluntary reduction in quarterly compensation for the board of directors
- Compensation reduction for salaried team members
- Freeze on all non-essential hiring
- Reduction of all non-essential spending
- Prioritization of critical maintenance capital expenditures
The company has certain facilities across the country that have remained operational throughout this time, and the majority of its other facilities either have re-opened already or are expected to return to operation by May 4.
