Patrick Industries Inc. has a market cap of $26 million; its shares were traded at around $2.84 with and P/S ratio of 0.1. PATK is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Net Income (Loss). Net income was $0.9 million or $0.09 per diluted share for first quarter 2010 compared to a net loss of $4.1 million or $0.45 per diluted share for 2009. The changes in the net income (loss) reflect the impact of the items previously discussed.
Operating Income. Operating income in first quarter 2010 was $0.1 million, an increase of $0.6 million from an operating loss of $0.5 million in 2009. Higher sales volumes and a decrease in warehouse and delivery expenses of approximately $0.2 million contributed to the operating income improvement in the quarter.
Net cash used in operating activities was $2.1 million in the first three months of 2010 compared to $1.3 million in 2009. Trade receivables increased $9.3 million in the first three months of 2010 from December 2009 reflecting a stronger seasonal demand cycle due to an increase in wholesale unit shipments of approximately 97% in the RV industry in the first quarter of 2010 compared to the first quarter of 2009. Additionally, inventories increased approximately $2.9 million in the first quarter of 2010 primarily resulting from the increase in sales to the RV industry during the first quarter of 2010. The Company continues to focus on aggressively managing inventory turns by closely following customer sales levels and increasing or reducing purchases correspondingly, while working together with key suppliers to reduce lead-time and minimum quantity requirements.
Investing activities provided cash of $1.8 million in the first three months of 2010 compared to $1.9 million in 2009. Proceeds from the sale of property, equipment and facility included $4.0 million from the sale of the Oregon facility in February 2010. Cash outflows in 2010 included the acquisition of Quality Hardwoods for $2.0 million. In addition, cash flows from investing activities for the second quarter of 2010 will reflect the receipt of cash proceeds pertaining to the sale of the California facility as discussed above. Approximately $2.0 million was received from the sale of the American Hardwoods operation in January 2009.
Capital expenditures in the first three months of 2010 were $0.3 million versus $0.1 million in the prior year. The capital plan for full year 2010 includes expenditures of up to $1.6 million.
Net cash flows provided by financing activities were approximately $0.5 million in the first three months of 2010 compared to cash outflows of $1.1 million in 2009. For the first three months of 2010, the Company borrowed approximately $4.5 million on its revolving line of credit. The Company also utilized the proceeds received from the sale of its Oregon facility to pay down approximately $4.0 million in principal on long-term debt. In addition, the Company used $4.3 million of the net proceeds received from the sale of its California facility to pay down principal on its long-term debt on March 29, 2010 (the beginning of the Company s second fiscal quarter). In accordance with its scheduled debt service requirements, the Company paid down approximately $0.8 million in principal on its term loan on March 31, 2010.
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