• Fourth Quarter Revenue: $846 million, an increase of 8%.
• Full Year Revenue: $3.7 billion, an increase of 7%.
• Adjusted Net Income per Diluted Share (Q4): $0.52.
• Adjusted Net Income per Diluted Share (Full Year): $4.34.
• Gross Margin (Q4): 22.1%.
• Gross Margin (Full Year): 22.5%.
• Operating Margin (Q4): 4.7% GAAP, 5.2% adjusted.
• Operating Margin (Full Year): 6.9% GAAP, 7.2% adjusted.
• Adjusted EBITDA (Q4): $89 million, margin of 10.6%.
• Adjusted EBITDA (Full Year): $452 million, margin of 12.2%.
• Free Cash Flow (Full Year): $251 million.
• Net Leverage: 2.7 times.
• Available Liquidity: $804 million.
• RV Revenue (Full Year): $1.6 billion, an increase of 8%.
• Marine Revenue (Full Year): $571 million, a decrease of 27%.
• Powersports Revenue (Full Year): $352 million, an increase of 189%.
• Housing Revenue (Full Year): $1.2 billion, an increase of 10%.
• SG&A Expenses (Q4): $81 million, an increase of 20%.
• SG&A Expenses (Full Year): $326 million, an increase of 9%.
• Amortization Expense (Full Year): $96 million, an increase of 22%.
• Cash Provided by Operations (Full Year): $327 million.
• Purchases of Property, Plant, and Equipment (Full Year): $76 million.
• Dividend Increase: 9% to $0.40 per share.

• Warning! GuruFocus has detected 8 Warning Signs with PATK.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Patrick Industries Inc (NASDAQ:PATK) reported an 8% increase in sales for the fourth quarter, reaching $846 million.
• The company successfully expanded its presence in the powersports space through the acquisition of Sportech and enhanced its aftermarket capabilities with the acquisition of RecPro.
• Patrick Industries Inc (NASDAQ:PATK) completed a debt refinancing that improved liquidity, reduced the cost of fixed-rate debt, and extended the maturity profile.
• The company maintained solid profitability in 2024, driven by market share gains and strong performance in the housing businesses, particularly in manufactured housing.
• Patrick Industries Inc (NASDAQ:PATK) has a strong balance sheet with approximately $804 million in net liquidity, providing flexibility for strategic opportunities and shareholder returns.

Negative Points

• The marine market experienced a decline, with fourth-quarter revenues down from $147 million in 2023 to $122 million in 2024.
• Operating expenses increased significantly, with SG&A expenses up 20% and amortization expenses up 26% in the fourth quarter, primarily due to acquisitions.
• The company faced a mix shift towards smaller, more affordable units, impacting gross margins and overall profitability.
• Marine wholesale shipments declined by an estimated 25% for the full year, reflecting continued softness in the market.
• Patrick Industries Inc (NASDAQ:PATK) anticipates a mid-single-digit decline in powersports unit shipments for 2025, indicating potential challenges in this segment.

Q & A Highlights

Q: How does the 2025 outlook compare to previous expectations, and are there any major changes? A: Andrew Nemeth, CEO, stated that there are no significant changes to the outlook. There is building optimism and some tailwinds compared to a quarter ago. However, they are keeping estimates in check as it's early in the retail selling season. They expect to have a clearer picture in the coming months.

Q: Can you break down the 8% growth in the fourth quarter? A: Andrew Roeder, CFO, explained that the 8% growth was driven by acquisition revenue, which was up 11% year-over-year. Industry was down 4%, largely due to mix, while organic growth was up 2%, with pricing down 2% and content share up 3.5%.

Q: What are the biggest opportunities for increasing penetration and driving organic growth in 2025 and beyond? A: Andrew Nemeth highlighted new product opportunities and prototyping efforts as key drivers for organic growth. The company has been active in developing new products and solutions, which they believe will help achieve or exceed their growth targets.

Q: How is the company managing its capital allocation strategy given the current market conditions? A: Andrew Nemeth mentioned that the company is carrying more inventory in anticipation of increased production. The M&A pipeline remains full, and they are actively pursuing opportunities. They plan to be disciplined and opportunistic with capital allocation, focusing on strategic acquisitions and cash flow generation.

Q: What is driving the increased enthusiasm in the RV segment, and how are OEMs responding? A: Andrew Nemeth attributed the enthusiasm to lean dealer inventories, OEM discipline, and consumer confidence. The outdoor enthusiast experience remains popular, and there is optimism in the market due to these factors. OEMs are maintaining a disciplined approach to inventory management.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.