<PAGE>
FORM 10Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995 Commission File Number 0-3922
PATRICK INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1057796
(State or other jurisdiction of (I.R.S. Employer
incorporated or organization) Identification No.)
1800 South 14th Street, Elkhart, IN 46516
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (219) 294-7511
NONE
Former name, former address and former fiscal year, if changed
since last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Shares of Common Stock Outstanding as of April 30, 1995:
5,943,992
<PAGE>
PATRICK INDUSTRIES, INC.
INDEX
Page No.
PART I: Financial Information
Unaudited Condensed Balance Sheets
March 31, 1995 & December 31, 1994 3
Unaudited Condensed Statements of Income
Three Months Ended March 31, 1995 & 1994, 4
Unaudited Condensed Statements of Cash Flows
Three Months Ended March 31, 1995 & 1994 5
Notes to Unaudited Condensed Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II: Other Information 10
Signatures 11
<PAGE>
PART I: FINANCIAL INFORMATION
PATRICK INDUSTRIES, INC. CONDENSED BALANCE SHEETS
(Unaudited) (Note)
MARCH 31 DECEMBER 31
1995 1994
ASSETS
CURRENT ASSETS
Cash $ 481,911 $ 666,986
Accounts Receivable, Net 22,628,923 18,445,638
Inventories 38,425,221 36,087,900
Other 186,227 291,194
Total Current Assets $61,722,282 $55,491,718
OTHER ASSETS $ 5,259,193 $ 3,370,013
CASH HELD IN ESCROW $ 3,315,307 $ 4,584,738
PROPERTY AND EQUIPMENT $48,375,434 $45,047,383
LESS ACCUMULATED DEPRECIATION 21,974,782 21,225,209
$26,400,652 $23,822,174
Total Assets $96,697,434 $87,268,643
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current Maturities of
Long-term Debt $ 1,700,000 $ 1,724,000
Accounts Payable 17,540,031 14,916,309
Accrued Expenses and
Taxes Payable 5,070,784 3,840,354
Total Current Liabilities $24,310,815 $20,480,663
LONG-TERM DEBT, LESS CURRENT
MATURITIES $24,400,000 $21,150,000
DEFERRED COMPENSATION
OBLIGATIONS $ 865,641 $ 838,971
DEFERRED TAX LIABILITIES $ 1,360,000 $ 1,360,000
SHAREHOLDERS' EQUITY
Common Stock $21,463,422 $21,457,167
Retained Earnings 24,297,556 21,981,842
Total Stockholders' Equity $45,760,978 $43,439,009
Total Liabilities and
Stockholders' Equity $96,697,434 $87,268,643
NOTE: The balance sheet at December 31, 1994 has been taken from
the audited financial statements at that date and condensed.
See accompanying notes to Unaudited Condensed Financial Statements.
<PAGE>
PATRICK INDUSTRIES, INC.
UNAUDITED CONDENSED STATEMENTS OF INCOME
THREE MONTHS ENDED
MARCH 31
1995 1994
NET SALES $87,030,721 $ 76,897,509
COST AND EXPENSES
Cost of Goods Sold $75,060,101 $ 67,360,302
Warehouse and Delivery Expenses 3,250,369 2,874,412
Selling and Administrative
Expenses 4,576,174 3,532,077
Financial Expenses, Net 347,764 224,013
$83,234,408 $ 73,990,804
INCOME BEFORE INCOME TAXES $ 3,796,313 $ 2,906,705
INCOME TAXES 1,480,600 1,133,600
NET INCOME $ 2,315,713 $ 1,773,105
EARNINGS PER COMMON SHARE $ .39 $ .29
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 5,940,809 6,174,533
See accompanying notes to Unaudited Condensed Financial Statements.
<PAGE>
PATRICK INDUSTRIES, INC.
UNAUDITED CONDENSED STATEMENTS OF
CASH FLOW
THREE MONTHS ENDED
MARCH 31
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 2,315,713 $ 1,773,105
Adjustment to Reconcile Net Income
to Net Cash:
Depreciation and Amortization 769,601 683,049
Other (21,000) 11,150
Change in Assets and Liabilities:
Decrease (Increase) in:
Accounts Receivable (3,919,057) (6,071,241)
Inventories (1,931,992) (611,656)
Other 118,262 (2,138)
Increase (Decrease) in:
Accounts Payable and Accrued Expenses 2,393,052 367,450
Income Taxes Payable and Deferred Taxes 1,461,100 1,090,095
Deferred Compensation 26,670 24,720
Net Cash Provided by (Used in)
Operating Activities $1,212,349 $(2,735,466)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures $(2,592,202) $(1,346,651)
Acquisition of Assets of U.S. Door (3,346,596) ---
Change in Cash Held in Escrow 1,269,431 ---
Proceeds from Sale of Assets 21,000 18,850
Other 18,688 20,408
Net Cash (Used in) Investing
Activities $(4,629,679) $(1,307,393)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Borrowings Under Debt Agreements $ 3,500,000 $ 3,725,000
Sale of Common Stock 6,255 2,294
Principal Payments on Debt (274,000) ---
Net Cash Provided by Financing
Activities $3,232,255 $ 3,727,294
(Decrease) in Cash and Cash
Equivalents $ (185,075) $ (315,565)
CASH and CASH EQUIVALENTS,
BEGINNING $ 666,986 $ 465,460
CASH and CASH EQUIVALENTS,
ENDING $ 481,911 $ 149,895
See accompanying notes to Unaudited Condensed Financial Statements.
<PAGE>
PATRICK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Registrant, the accompanying unaudited
condensed financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to
present fairly financial position as of March 31, 1995, and
December 31, 1994, and the results of operations and cash flows
for the three months ended March 31, 1995 and 1994.
2. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed financial
statements be read in conjunction with the financial statements
and notes thereto included in Registrant's December 31, 1994
audited financial statements. The results of operations for the
three months periods ended March 31, 1995 and 1994 are not
necessarily indicative of the results to be expected for the full
year.
3. The inventories on March 31, 1995 and December 31, 1994
consist of the following classes:
March 31 December 31
1995 1994
Raw Materials $25,235,795 $23,630,848
Work in Process 647,015 738,439
Finished 3,044,051 3,618,587
Total Manufactured Goods $28,926,861 $27,987,874
Distribution Products 9,498,360 8,100,026
TOTAL INVENTORIES $38,425,221 $36,087,900
4. The earnings per common share for the three months ended
March 31, 1995 and 1994 have been computed based on the weighted
average number of shares of common stock outstanding of 5,940,809
and 6,174,533 respectively. The number of shares reflect the
results of the March 8, 1994 two for one Stock Split.
<PAGE>
5. On January 30, 1995, the Registrant purchased substantially
all of the assets of U.S. Door, a manufacturer of wooden cabinet
doors in Phoenix, Arizona, for $3,346,500. The transaction was
accounted for as a purchase.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
GENERAL
The economy and the industries served by the Registrant improved
starting in 1992 as net sales increased by 28% over 1991, and in
1993 net sales increased 40% over 1992. In 1994, the Registrant
continued its growth and recorded its highest annual sales of
$331 million.
The following table sets forth the percentage relationship to net
sales of certain items in the Registrant's Statements of
Operations:
Quarterly Ended
March 31,
1995 1994 1993
Net Sales 100.0% 100.0% 100.0%
Cost of Sales 86.3 87.6 87.4
Gross Profit 13.7 12.4 12.6
Warehouse and Delivery 3.7 3.7 3.9
Selling, General & Administrative 5.3 4.6 5.3
Operating Income 4.7 4.1 3.4
Net Income 2.7 2.3 1.8
RESULTS OF OPERATIONS
<PAGE>
Quarter Ended March 31, 1995 Compared to Quarter Ended
March 31, 1994
Net Sales. Net sales increased by $10.1 million, or 13.2%,
from $76.9 million for the quarter ended March 31, 1994, to $87.0
million in the quarter ended March 31, 1995. This sales increase
was attributable to increases in units produced by the
manufactured housing, recreational vehicle and other building
products industries served by the Registrant, and increased
demand for Registrant's products. This increase, although less
as a percentage than the previous two years first quarters, is
further evidence of the continuing improvement in these
industries.
Gross Profit. Gross profit increased by $2.4 million, or
25.5%, from $9.5 million in the first quarter 1994, to $11.9
million in the first quarter 1995. As a percentage of net sales,
gross profit increased from 12.4% in first quarter 1994 to 13.7%
in 1995. This increase in gross profit resulted from fewer cost
increases of certain of the Registrant's products during the
period compared to 1994, and certain inventory items having cost
below market cost.
Warehouse and Delivery Expenses. Warehouse and delivery
expenses increased $0.4 million or 13.1%, from $2.9 million in
1994, to $3.3 million in the first quarter 1995. As a percentage
of net sales, warehouse and delivery expenses remained the same
at 3.7% for 1994 and 1995.
Selling, General and Administrative Expenses. Selling,
general and administrative expenses increased by $1.0 million, or
29.6%, from $3.5 million in 1994, to $4.5 million in 1995. As a
percentage of net sales, selling, general and administrative
expenses increased from 4.6% in 1994 to 5.3% in 1995. This
percentage increase is due to unusually large group insurance
claims, additional personnel costs and other increased expenses
because of the higher sales levels.
Operating Income. Operating income increased by $1.0
million, or 32%, from $3.1 million in 1994, to $4.1 million in
1995. This increase is primarily attributable to the $2.4
million increase in gross profit. As a percentage of sales,
operating income increased from 4.1% in 1994 to 4.7% in 1995.
Interest Expense. Interest expense increased by $124,000
from $224,000 in 1994, to $348,000 in 1995. This increase was
due to higher interest rates and higher average borrowing levels.
<PAGE>
Net Income. Net income increased by $0.5 million from $1.8
million in 1994, to $2.3 million in 1995. This increase in net
income is primarily attributable to the factors described above.
Quarter Ended March 31, 1994 Compared to Quarter Ended
March 31, 1993
Net Sales. Net sales increased by $21.9 million, or 39.9%,
from $55.0 million for the quarter ended March 31, 1993, to $76.9
million in the quarter ended March 31, 1994. This sales increase
was attributable to increases in units produced by the
manufactured housing, recreational vehicle and other building
products industries served by the Registrant, and increased
demand for Registrant's products. This increase is further
evidence of the continuing improvement in these industries.
Gross Profit. Gross profit increased by $2.6 million, or
38.0%, from $6.9 million in the first quarter 1993, to $9.5
million in the first quarter 1994. As a percentage of net sales,
gross profit decreased from 12.6% in first quarter 1993 to 12.4%
in 1994. This decrease in gross profit resulted from cost
increases and competitive pricing of certain of the Registrant's
products during the period.
Warehouse and Delivery Expenses. Warehouse and delivery
expenses increased $0.8 million, or 34.5%, from $2.1 million in
1993, to $2.9 million in the first quarter 1994. As a percentage
of net sales, warehouse and delivery expenses decreased from 3.9%
in 1993 to 3.7% in 1994. This percentage decrease is primarily
due to increased sales volumes.
Selling, General and Administrative Expenses. Selling,
general and administrative expenses increased by $0.6 million, or
21.2%, from $2.9 million in 1993, to $3.5 million in 1994. As a
percentage of net sales, selling, general and administrative
expenses decreased from 5.3% in 1993 to 4.6% in 1994. This
percentage decrease is primarily due to increased sales volumes.
Operating Income. Operating income increased by $1.2
million, or 68%, from $1.9 million in 1993, to $3.1 million in
1994. This increase is primarily attributable to the $2.6
million increase in gross profit. As a percentage of sales,
operating income increased from 3.4% in 1993 to 4.1% in 1994.
Interest Expense. Interest expense decreased by $18,000
from $242,000 in 1993, to $224,000 in 1994. This decrease was
due to lower interest rates and lower average borrowing levels.
Net Income. Net income increased by $0.8 million from $1.0
million in 1993, to $1.8 million in 1994. This increase in net
income is primarily attributable to the factors described above.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Registrant's primary capital requirements are to meet
working capital needs, support its capital expenditure plans and
meet debt service requirements.
The Registrant acquired property and equipment of $2.6
million and acquired substantially all of the assets of U.S. Door
for $3.3 million during the quarter ended March 31, 1995.
These were funded by a combination of cash provided by operations
and net borrowings under credit agreements.
The Registrant has a bank financing agreement (the Credit
Agreement) with NBD Bank, N.A. The Credit Agreement provides for
a $10 million term loan with a maturity in February 1999 and a
credit revolver loan of up to $10 million which matures in
February 1997. At March 31, 1995, $9.0 million and $7.5 million
were outstanding on the term loan and the credit revolver loan,
respectively. Pursuant to the Credit Agreement, the Registrant
is required to maintain certain financial ratios, all of which
are currently complied with.
The Registrant has also financed in late 1994 the
acquisition of land, building, and equipment in Oregon with a
$6,000,000 industrial revenue bond. At March 31, 1995, $2.7
million of the bond proceeds have been used for construction of
the project and $3.3 million was held in escrow for future
payments on the project.
The Registrant believes that cash generated from operations,
bond proceeds held in escrow and borrowings under its credit
agreements will be sufficient to fund its working capital
requirements and capital expenditures as currently contemplated.
SEASONALITY
Manufacturing operations in the manufactured housing and
recreational vehicle industries tend to be seasonal and are
generally at the highest levels when the climate is temperate.
Accordingly, the Registrant's sales and profits are generally
highest in the second and third quarters. However, due to
dramatic increases in production of manufactured housing and
recreational vehicles, the first quarter of 1994 and 1995 and the
fourth quarters of 1993 and 1994 were unusual in their high sales
and gross profit levels during those winter months when compared
to prior years.
<PAGE>
INFLATION
The Registrant does not believe that inflation had a
material effect on results of operations for the periods
presented.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Ex-27 - Financial Data Schedule
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
PATRICK INDUSTRIES, INC.
(Registrant)
_________________________________
Date May 12, 1995 /S/Mervin D. Lung
Mervin D. Lung
(Chairman of the Board)
________________________________
Date May 4, 1995 /S/David D. Lung
David D. Lung
(President)
________________________________
Date May 5, 1995 /S//Keith V. Kankel
Keith V. Kankel
(Vice President Finance)
(Principal Accounting Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 481,911
<SECURITIES> 0
<RECEIVABLES> 22,773,923
<ALLOWANCES> 145,000
<INVENTORY> 38,425,221
<CURRENT-ASSETS> 61,722,282
<PP&E> 48,375,434
<DEPRECIATION> 21,974,782
<TOTAL-ASSETS> 96,697,434
<CURRENT-LIABILITIES> 24,310,815
<BONDS> 0
<COMMON> 21,463,422
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 96,697,434
<SALES> 87,030,721
<TOTAL-REVENUES> 87,030,721
<CGS> 75,060,101
<TOTAL-COSTS> 82,886,644
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 347,764
<INCOME-PRETAX> 3,796,313
<INCOME-TAX> 1,480,600
<INCOME-CONTINUING> 2,315,713
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,315,713
<EPS-PRIMARY> .39
<EPS-DILUTED> .39
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