FORM 10-Q
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, 1996 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, 1996: 5,921,466
PATRICK INDUSTRIES, INC.
INDEX
Page No.
PART I: Financial Information
Unaudited Condensed Balance Sheets
March 31, 1996 & December 31, 1995
Unaudited Condensed Statements of Income
Three Months Ended March 31, 1996 & 1995,
Unaudited Condensed Statements of Cash Flows
Three Months Ended March 31, 1996 & 1995
Notes to Unaudited Condensed Financial Statements
Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II: Other Information
Signatures
PART I: FINANCIAL INFORMATION
<TABLE>
PATRICK INDUSTRIES, INC. CONDENSED BALANCE SHEETS
<CAPTION>
(Unaudited) (Note)
MARCH 31 DECEMBER 31
1996 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Temporary Investments $ 3,131,491 $ 1,349,709
Accounts Receivable, Net 26,295,906 20,427,355
Inventories 33,860,226 35,462,152
Other 220,076 387,782
Total Current Assets $ 63,507,699 $57,626,998
PROPERTY AND EQUIPMENT, at cost $ 57,057,563 $56,189,860
Less Accumulated Depreciation 23,557,675 23,140,702
$ 33,499,888 $33,049,158
INTANGIBLE AND OTHER ASSETS $ 5,161,298 $ 5,239,766
Total Assets $102,168,885 $95,915,922
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current Maturities of Long-term Debt $ 700,000 $ 700,000
Accounts Payable 13,331,340 9,589,103
Accrued Expenses and Taxes Payable 5,053,879 4,057,446
Total Current Liabilities $ 19,085,219 $14,346,549
LONG-TERM DEBT, LESS CURRENT MATURITIES $ 26,200,000 $26,200,000
DEFERRED COMPENSATION OBLIGATIONS AND OTHER $ 1,036,119 $ 919,821
DEFERRED TAX LIABILITIES $ 1,485,000 $ 1,461,000
SHAREHOLDERS' EQUITY
Common Stock $ 21,294,217 $21,626,489
Retained Earnings 33,068,330 31,362,063
Total Stockholders' Equity $ 54,362,547 $52,988,552
Total Liabilities and Stockholders' Equity $102,168,885 $95,915,922
NOTE: The balance sheet at December 31, 1995 has been taken from the audited
financial statements at that date and condensed. See accompanying notes to
Unaudited Condensed Financial Statements.
</TABLE>
<TABLE>
PATRICK INDUSTRIES, INC.
UNAUDITED CONDENSED STATEMENTS OF INCOME
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1996 1995
<S> <C> <C>
NET SALES $93,767,541 $87,030,721
COST AND EXPENSES
Cost of Goods Sold $82,014,145 $75,060,101
Warehouse and Delivery Expenses 3,364,653 3,250,369
Selling and Administrative Expenses 4,924,656 4,576,174
Financial Expenses, Net 296,881 347,764
$90,600,335 $83,234,408
INCOME BEFORE INCOME TAXES $ 3,167,206 $ 3,796,313
INCOME TAXES 1,222,500 1,480,600
NET INCOME $ 1,944,706 $ 2,315,713
EARNINGS PER COMMON SHARE $ .33 $ .39
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 5,967,157 5,940,809
See accompanying notes to Unaudited Condensed Financial Statements.
</TABLE>
<TABLE>
PATRICK INDUSTRIES, INC.
UNAUDITED CONDENSED STATEMENTS OF
CASH FLOW
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 1,944,706 $ 2,315,713
Adjustment to Reconcile Net Income to Net Cash:
Depreciation and Amortization 1,061,881 769,601
Other (378) (21,000)
Change in Assets and Liabilities:
Decrease (Increase) in:
Accounts Receivable (5,868,551) (3,919,057)
Inventories 1,601,926 (1,931,992)
Other 167,706 118,262
Increase (Decrease) in:
Accounts Payable and Accrued Expenses 3,756,025 2,393,052
Income Taxes Payable and Deferred Taxes 1,008,568 1,461,100
Deferred Compensation 35,749 26,670
Net Cash Provided by Operating
Activities $ 3,707,632 $ 1,212,349
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures $ (1,458,961) $(2,592,202)
Acquisition of Assets of U.S. Door - - - (3,346,596)
Change in Cash Held in Escrow - - - 1,269,431
Proceeds from Sale of Assets 750 21,000
Other 22,523 18,688
Net Cash (Used in) Investing Activities $(1,435,688) $(4,629,679)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash Dividend $ (238,439) $ - - -
Net Borrowings Under Debt Agreements - - - 3,500,000
Sale of Common Stock 23,978 6,255
Principal Payments on Debt - - - (274,000)
Reacquisition of Common Stock (356,250) - - -
Other 80,549 - - -
Net Cash Provided by (Used In) Financing
Activities $ (490,162) $ 3,232,255
Increase (Decrease) in Cash and Cash
Equivalents $ 1,781,782 $ (185,075)
CASH and CASH EQUIVALENTS, BEGINNING $ 1,349,709 $ 666,986
CASH and CASH EQUIVALENTS, ENDING $ 3,131,491 $ 481,911
See accompanying notes to Unaudited Condensed Financial Statements.
</TABLE>
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, 1996, and December 31, 1995, and the results of operations and
cash flows for the three months ended
March 31, 1996 and 1995.
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, 1995
audited financial statements. The results of operations for the three
months periods ended March 31, 1996 and 1995 are not necessarily indicative
of the results to be expected for the full year.
3. The inventories on March 31, 1996 and December 31, 1995 consist of the
following classes:
<TABLE>
<CAPTION>
March 31 December 31
1996 1995
<S> <C> <C>
Raw Materials $21,527,255 $23,105,916
Work in Process 1,001,192 877,805
Finished 2,877,248 3,197,561
Total Manufactured Goods $25,405,695 $27,181,282
Distribution Products 8,454,531 8,280,870
TOTAL INVENTORIES $33,860,226 $35,462,152
</TABLE>
The inventories are stated at the lower of cost, First-In, First-Out (FIFO)
method, or market.
4. The earnings per common share for the three months ended March 31, 1996 and
1995 have been computed based on the weighted average number of shares of
common stock outstanding of 5,967,157 and 5,940,809 respectively.
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 annually from $184 million in 1992 to over $362
million in 1995.
The following table sets forth the percentage relationship to net sales of
certain items in the Registrant's Statements of Operations:
<TABLE>
<CAPTION>
Quarterly Ended
March 31,
1995 1994 1993
<S> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0%
Cost of Sales 87.5 86.3 87.6
Gross Profit 12.5 13.7 12.4
Warehouse and Delivery 3.6 3.7 3.7
Selling, General & Administrative 5.2 5.3 4.6
Operating Income 3.7 4.7 4.1
Net Income 2.1 2.7 2.3
</TABLE>
RESULTS OF OPERATIONS
Quarter Ended March 31, 1996 Compared to Quarter Ended March 31, 1995
Net Sales. Net sales increased by $6.7 million, or 7.7%, from $87.0
million for the quarter ended March 31, 1995, to $93.8 million in the quarter
ended March 31, 1996. This sales increase was attributable to a 7% increase in
units shipped by the Manufactured Housing industry, which represents
approximately 68% of the Registrant's sales. The Registrant's sales to the
Recreational Vehicle industry were down as a percent of total company sales as a
result of a slight decline in units produced in that industry, which represents
approximately 16% of Registrant's sales.
Gross Profit. Gross profit decreased by approximately $217,000, or 1.8%,
from $11.9 million in the first quarter of 1995, to $11.7 million in the same
1996 quarter. As a percentage of net sales, gross profit decreased from 13.7%
in first quarter 1995 to 12.5% in 1996. This decrease in gross profit was the
result of lower volume and higher raw material costs of sales in the
Registrant's aluminum extrusion division, and lower sales volume and plant
relocation costs at the new Oregon facility. The Registrant also
experienced highly competitive market pricing of certain products in the
first quarter of 1996.
Warehouse and Delivery Expenses. Warehouse and delivery expenses increased
approximately $114,000 or 3.5%, from $3.3 million in 1995, to $3.4 million in
the first quarter of 1996. As a percentage of net sales, warehouse and delivery
expenses decreased from 3.7% in 1995 to 3.6% in the 1996 first quarter.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by approximately $348,000, or 7.6%, from $4.5
million in 1995, to $4.9 million in 1996. As a percentage of net sales,
selling, general and administrative expenses decreased from 5.3% in 1995 to 5.2%
in 1996.
Operating Income. Operating income decreased by approximately $680,000
because of the reduced gross profit and increases in warehouse and delivery, and
selling, general and administrative expenses. As a percentage of sales,
operating income decreased from 4.7% in 1995 to 3.7% in the 1996 first quarter.
Interest Expense. Interest expense decreased by approximately $51,000 from
$348,000 in 1995 to $297,000 in the first quarter of 1996. The Registrant's
borrowing levels in the 1996 period were slightly higher but at lower rates.
Net Income. Net income decreased by approximately $371,000 from $2.3
million in 1995 to $1.9 million in 1996 for the first quarter ended March 31.
This decrease is attributable to the factors described above.
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.
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.
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, in September, 1995, issued to an insurance company in a
private placement $18,000,000 of senior unsecured notes. The ten year notes
bear interest at 6.82%, with semi-annual interest payments beginning in 1996 and
seven annual principal repayments beginning September 15, 1999. These funds
were used to reduce existing bank debt and for working capital needs.
The Registrant has a bank financing agreement (the Credit Agreement) with
NBD Bank, N.A. The Credit Agreement provided for a $10 million term loan with a
maturity in February, 1999 and a credit revolver loan of up to $13 million with
maturity in February, 1997. In September, 1995 with funds from the insurance
company private placement, the Registrant prepaid the term loan in full and paid
the revolver outstanding balance. On October 31, 1995 the bank financing
agreement was amended reducing the credit revolver loan availability to
$5,000,000. Pursuant to the Credit Agreement, the Registrant is required to
maintain certain financial ratios, all of which are currently complied with.
The Registrant believes that cash generated from operations 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 historically have been 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 quarters of 1995 and 1994 and the fourth
quarters of 1994 and 1993 were unusual in their high sales and gross profit
levels during those winter months when compared to historical trends.
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
(a) Exhibits
3.1 Articles of Amendment of the Articles of Incorporation of
Patrick Industries, Inc.
3.2 Certificate of Designations, Preferences and Rights of
Preferred Stock of Patrick Industries, Inc.
27 Financial Data Schedule
(b) There were no Reports filed on Form 8-K.
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 10, 1996 /S/Mervin D. Lung
Mervin D. Lung
(Chairman of the Board)
Date May 10, 1996 /S/David D. Lung
David D. Lung
(President)
Date May 10, 1996 /S/Keith V. Kankel
Keith V. Kankel
(Vice President Finance)
(Principal Accounting Officer)
EXHIBIT 3.1
ARTICLES OF AMENDMENT OF THE Provided by: Joseph H. Hogsett
[SEAL] ARTICLES OF INCORPORATION SECRETARY OF STATE OF INDIANA
State Form 38333 (R5/9-91) CORPORATIONS DIVISION
State Board of Accounts Approved 1988
INSTRUCTIONS: Use 8 1/2 X 11 inch white Indiana Code 23-1-38-1 et seg.
paper for inserts. Filing requirements - FILING FEE $30.00
Present original and one copy to address
in upper right corner of this form.
___________________________________________________________________________
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF:
___________________________________________________________________________
PATRICK INDUSTRIES, INC.
___________________________________________________________________________
The undersigned officers of Patrick Industries, Inc.
___________________________________________________________________________
(hereinafter referred to as the "Corporation") existing pursuant to the
provisions of:
(Indicate appropriate act)
/X/ Indiana Business Corporation Law / / Indiana Professional Corporation
Act of 1983
as amended (hereinafter referred to as the "Act"), desiring to give notice
of corporate action effectuating amendment of certain provisions of its
Articles of Incorporation, certify the following facts:
___________________________________________________________________________
ARTICLE I Amendment(s)
___________________________________________________________________________
SECTION 1 The date of incorporation of the corporation is:
January 3, 1961.
___________________________________________________________________________
SECTION 2 The name of the corporation following this amendment to the
Articles of Incorporation is:
Patrick Industries, Inc.
___________________________________________________________________________
SECTION 3
The exact text of Article(s) V of the Articles of Incorporation is now as
follows:
See Exhibit A attached hereto.
___________________________________________________________________________
SECTION 4 Date of each amendment's adoption:
February 10, 1994.
___________________________________________________________________________
ARTICLE II Manner of Adoption and Vote
___________________________________________________________________________
SECTION 1 Action by Directors:
The Board of Directors of the Corporation duly adopted a resolution
proposing to amend the terms and provisions of Article(s) __________ of the
Articles of Incorporation and directing a meeting of the Shareholders, to
be held on ___________________, allowing such Shareholders to vote on the
proposed amendment.
The resolution was adopted by: (Select appropriate paragraph)
(a) Vote of the Board of Directors at a meeting held on
_____________, 19__, at which a quorum of such Board was present.
(b) Written consent executed on February 10, 1994, and signed by all
members of the Board of Directors. Adopted in accordance with
Section 23-1-38-2(4).
___________________________________________________________________________
SECTION 2 Action by Shareholders. N/A
The Shareholders of the Corporation entitled to vote in respect of the
Articles of Amendment adopted the proposed amendment. The amendment was
adopted by: (Select appropriate paragraph)
(a) Vote of such Shareholders during the meeting called by the Board
of Directors. The result of such vote is as follows:
TOTAL
SHAREHOLDERS ENTITLED TO VOTE: ____________
SHAREHOLDERS VOTED IN FAVOR: ____________
SHAREHOLDERS VOTED AGAINST: ____________
(b) Written consent executed on ________________, 19__, and signed by
all such Shareholders.
___________________________________________________________________________
SECTION 3 Compliance with Legal Requirements.
The manner of the adoption of the Articles of Amendment an the vote by
which they were adopted constitute full legal compliance with the
provisions of the Act, the Articles of Incorporation, and the by-Laws of
the Corporation.
___________________________________________________________________________
I hereby verify subject to the penalties of perjury that the statements
contained are true this 4th day of March, 1994.
___________________________________________________________________________
______________________________ Keith V. Kankel
Current Officer's Signature Officer's Name Printed
___________________________________________________________________________
Officer's Title: Vice President of Finance, Secretary and
Treasurer
___________________________________________________________________________
Exhibit A
to Articles of Amendment
of the Articles of Incorporation
of PATRICK INDUSTRIES, INC.
ARTICLE FIVE
Prior to March 8, 1994, the Corporation had authority to issue six
million (6,000,000) shares of Common Stock, no par value, and one million
(1,000,000) shares of Preferred Stock, no par value. Effective on March 8,
1994, each issued and outstanding share of the Corporation's Common Stock, no
par value, and each unissued authorized share of the Corporation's Common Stock,
no par value, shall be split two-for-one. The split-up of all shares shall
occur automatically and without any action on the part of any holder thereof.
To effectuate such split, the Corporation shall distribute on or about March 22,
1994 one additional share of Common Stock, no par value, for each one
outstanding share of Common Stock, no par value, to the shareholders of record
at the close of business on March 8, 1994. The split-up shall not affect the
capital accounts of the Corporation.
Giving effect to the aforesaid stock split, the designation and number
of shares that the Corporation shall have authority to issue as of March 8,
1994, is twelve million (12,000,000) shares of Common Stock, no par value, and
one million (1,000,000) shares of Preferred Stock, no par value.
EXHIBIT 3.2
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF PREFERRED STOCK
of
PATRICK INDUSTRIES, INC.
Pursuant to Section 23-1-25-2
Business Corporation Law of the State of Indiana
We, the President and Secretary of Patrick Industries, Inc., a
corporation organized and existing under the Business Corporation Law of the
State of Indiana, in accordance with the provisions of Section 23-1-25-2
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Articles of Incorporation of the said Corporation, the said Board of
Directors on February 29, 1996, adopted the following resolution creating a
series of 100,000 shares of Preferred Stock designated as "Preferred Stock,
Series A":
NOW BE IT RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, as amended, a series of Preferred Stock of the
Corporation be, and it hereby is, created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. Designation and Amount.
The shares of such series shall be designated as "Preferred Stock,
Series A" (the "Preferred Stock") and the number of shares constituting such
series shall be 100,000. The Preferred Stock may be issued in fractional
amounts that are integral multiples of one one-hundredth.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of preferred stock ranking prior and superior to the
shares of Preferred Stock with respect to dividends, the holders of shares
of Preferred Stock, in preference to the holders of common stock, without
par value, of the Corporation (the "Common Stock") and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board
of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the fifteenth day of March, June, September
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount
of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share
of Preferred Stock. In the event the Corporation shall at any time on or
after March 20, 1996 declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision of combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Preferred
Stock were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock).
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Preferred Stock, unless the
date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the
date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record date
shall be not more than 60 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights.
The holders of shares of Preferred Stock shall have the following
voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Preferred Stock shall entitle the holder thereof to 100 votes
on all matters submitted to a vote of the shareholders of the Corporation.
In the event the Corporation shall at any time on or after March 20, 1996
declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the number
of votes per share to which holders of shares of Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event, and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Preferred Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
(C) Except as set forth herein, holders of Preferred Stock shall have
no special voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Preferred Stock outstanding shall
have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions
on, any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Preferred Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Preferred Stock,
except dividends paid ratably on the Preferred Stock and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) to the Preferred Stock,
provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Preferred Stock, or any shares of stock ranking on a parity with
the Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares.
Any shares of Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of preferred stock and may be reissued as
part of a new series of preferred stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Preferred Stock unless, prior thereto, the holders of shares of Preferred Stock
shall have received $100.00 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment, provided that the holders of shares of Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, or (2) to the holders of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Preferred Stock, except distributions made ratably on the
Preferred Stock and all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time on or after March 20, 1996 declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Preferred Stock then outstanding
shall at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time on or after March 20, 1996 declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption.
The shares of Preferred Stock shall not be redeemable. The preceding
sentence shall not limit the ability of the Corporation to purchase or otherwise
deal in such shares of stock to the extent permitted by law.
Section 9. Amendment.
The Articles of Incorporation of the Corporation shall not be amended
in any manner which would materially alter or change the powers, preferences or
special rights of the Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds or more of the outstanding shares
of Preferred Stock, voting as a single class.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury as of this
____ day of March, 1996.
By: /s/ Thomas G. Baer
Vice President
ATTEST:
/s/ Keith V. Kankel
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Patrick
Industries, Inc.'s Form 10-Q and is qualified in its entirety by reference to
such Form 10-Q filing.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,131,491
<SECURITIES> 0
<RECEIVABLES> 26,420,906
<ALLOWANCES> 125,000
<INVENTORY> 33,860,226
<CURRENT-ASSETS> 63,507,699
<PP&E> 57,057,563
<DEPRECIATION> 23,557,675
<TOTAL-ASSETS> 102,168,885
<CURRENT-LIABILITIES> 19,085,219
<BONDS> 0
0
0
<COMMON> 21,294,217
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 102,168,885
<SALES> 93,767,541
<TOTAL-REVENUES> 93,767,541
<CGS> 82,014,145
<TOTAL-COSTS> 90,303,454
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 296,881
<INCOME-PRETAX> 3,167,206
<INCOME-TAX> 1,222,500
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,944,706
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
</TABLE>
