Patrick Industries’ second quarter earnings reflect the industry-wide cutbacks being made by RV manufacturers.
The company reported sales in the second quarter of $921 million, a 38% drop over the $1.48 billion in the second quarter of last year, which was a company record. Net income in the recent quarter was $42 million, a 64% drop from the year-ago period.
“We are incredibly proud of our team’s second-quarter efforts, particularly our working capital discipline in alignment with aggressive dealer inventory management by OEMs in the RV industry and our other markets calibrating to the challenging macroeconomic environment,” said Andy Nemeth, CEO. “Our results are a reflection of our team’s nimbleness, resilience, and ability to adapt to dynamic market conditions while also noting that last year’s second-quarter earnings were the highest quarterly earnings in our company’s history. Our performance continues to reflect the benefits of our strategic diversification initiatives helping to stabilize our margins while positioning us to quickly pivot and leverage our highly variable cost structure when our markets rebound. Through continued prudent balance sheet management, we have reduced our inventories by $113 million from the end of 2022, and $184 million from the second quarter of 2022, generating significant cash flow and further enabling us to execute our strategy.”
For the last two quarters, Patrick’s sales were $1.8 billion, a drop from $2.8 billion the first half of last year. Net income was $72 million, a drop from last year’s $229 million.
In Q2, RV products made up 42% of Patrick’s sales and manufactured housing is 29%.
“Our proven business model, strategic diversification across the leisure lifestyle and housing markets, disciplined inventory management, strong cash flow and solid balance sheet continue to position us to navigate the current macroeconomic environment and drive long-term value for our stakeholders,” Nemeth added. “While we acknowledge the current macroeconomic challenges and their impact on our business, we are optimistic about the future of the leisure lifestyle and housing markets. With implied RV dealer inventory levels continuing to decline in the second quarter, we are beginning to detect potential tailwinds building on the horizon in the RV industry. Strategically, we remain proactive, and our significant liquidity supports our ability to capitalize on emerging opportunities to enhance Patrick’s platform for growth.”