Company Quick10K Filing
Patrick Industries
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 23 $1,081
10-Q 2019-11-07 Quarter: 2019-09-29
10-Q 2019-08-02 Quarter: 2019-06-30
10-Q 2019-05-09 Quarter: 2019-03-31
10-K 2019-02-28 Annual: 2018-12-31
10-Q 2018-11-08 Quarter: 2018-09-30
10-Q 2018-08-09 Quarter: 2018-07-01
10-Q 2018-05-10 Quarter: 2018-04-01
10-K 2018-02-28 Annual: 2017-12-31
10-Q 2017-11-02 Quarter: 2017-09-24
10-Q 2017-08-03 Quarter: 2017-06-25
10-Q 2017-05-04 Quarter: 2017-03-26
10-K 2017-02-28 Annual: 2016-12-31
10-Q 2016-11-03 Quarter: 2016-09-25
10-Q 2016-08-04 Quarter: 2016-06-26
10-Q 2016-05-05 Quarter: 2016-03-27
10-K 2016-03-14 Annual: 2015-12-31
10-Q 2015-11-05 Quarter: 2015-09-27
10-Q 2015-08-06 Quarter: 2015-06-28
10-Q 2015-05-07 Quarter: 2015-03-29
10-K 2015-03-13 Annual: 2014-12-31
10-Q 2014-11-07 Quarter: 2014-09-28
10-Q 2014-08-08 Quarter: 2014-06-29
10-Q 2014-05-08 Quarter: 2014-03-30
10-K 2014-03-14 Annual: 2013-12-31
10-Q 2013-11-12 Quarter: 2013-09-29
10-Q 2013-08-13 Quarter: 2013-06-30
10-Q 2013-05-14 Quarter: 2013-03-31
10-K 2013-03-29 Annual: 2012-12-31
10-Q 2012-11-13 Quarter: 2012-09-30
10-Q 2012-08-14 Quarter: 2012-07-01
10-Q 2012-05-15 Quarter: 2012-04-01
10-K 2012-03-29 Annual: 2011-12-31
10-Q 2011-11-08 Quarter: 2011-09-25
10-Q 2011-08-09 Quarter: 2011-06-26
10-Q 2011-05-10 Quarter: 2011-03-27
10-K 2011-03-30 Annual: 2010-12-31
10-Q 2010-11-09 Quarter: 2010-09-26
10-Q 2010-08-10 Quarter: 2010-06-27
10-Q 2010-05-11 Quarter: 2010-03-28
10-K 2010-03-30 Annual: 2009-12-31
8-K 2020-02-13 Earnings, Regulation FD, Exhibits
8-K 2020-01-30 Regulation FD, Exhibits
8-K 2020-01-08 Regulation FD, Exhibits
8-K 2019-12-23 Regulation FD, Exhibits
8-K 2019-12-02 Other Events, Exhibits
8-K 2019-11-14 Officers, Amend Bylaw, Exhibits
8-K 2019-10-24 Earnings, Exhibits
8-K 2019-10-24 Regulation FD, Exhibits
8-K 2019-10-10 Regulation FD, Exhibits
8-K 2019-09-30 Regulation FD, Exhibits
8-K 2019-09-19 Regulation FD, Exhibits
8-K 2019-09-17 Enter Agreement, Off-BS Arrangement, Regulation FD, Exhibits
8-K 2019-09-12 Enter Agreement, Regulation FD, Exhibits
8-K 2019-07-25 Regulation FD, Exhibits
8-K 2019-07-25 Earnings, Exhibits
8-K 2019-07-11 Regulation FD, Exhibits
8-K 2019-06-04 Regulation FD, Exhibits
8-K 2019-06-03 Accountant, Exhibits
8-K 2019-05-15 Amend Bylaw, Shareholder Vote, Exhibits
8-K 2019-04-25 Regulation FD, Exhibits
8-K 2019-04-25 Earnings, Exhibits
8-K 2019-04-11 Regulation FD, Exhibits
8-K 2019-04-09 Regulation FD, Exhibits
8-K 2019-03-21 Officers, Exhibits
8-K 2019-02-19 Regulation FD, Exhibits
8-K 2019-02-14 Earnings, Exhibits
8-K 2019-01-31 Regulation FD, Exhibits
8-K 2018-12-05 Regulation FD, Exhibits
8-K 2018-12-03 Regulation FD, Exhibits
8-K 2018-10-25 Regulation FD, Exhibits
8-K 2018-10-25 Earnings, Other Events, Exhibits
8-K 2018-10-11 Regulation FD, Exhibits
8-K 2018-10-01 Regulation FD, Exhibits
8-K 2018-09-13 Regulation FD, Exhibits
8-K 2018-08-27 Regulation FD, Exhibits
8-K 2018-07-30 Regulation FD, Exhibits
8-K 2018-07-26 Regulation FD, Exhibits
8-K 2018-07-26 Earnings, Exhibits
8-K 2018-07-12 Regulation FD, Exhibits
8-K 2018-06-05 Enter Agreement, Off-BS Arrangement, Regulation FD, Exhibits
8-K 2018-05-31 Regulation FD, Exhibits
8-K 2018-05-16 Officers, Shareholder Vote, Other Events, Exhibits
8-K 2018-04-30 Regulation FD, Exhibits
8-K 2018-04-26 Earnings, Exhibits
8-K 2018-04-26 Regulation FD, Exhibits
8-K 2018-04-12 Regulation FD, Exhibits
8-K 2018-03-19 Regulation FD, Exhibits
8-K 2018-03-12 Regulation FD, Exhibits
8-K 2018-03-05 Regulation FD, Exhibits
8-K 2018-02-26 Regulation FD, Exhibits
8-K 2018-02-20 Regulation FD, Exhibits
8-K 2018-02-15 Earnings, Exhibits
8-K 2018-02-15 Regulation FD, Exhibits
8-K 2018-02-01 Regulation FD, Exhibits
8-K 2018-01-29 Enter Agreement, Off-BS Arrangement, Other Events, Exhibits
8-K 2018-01-22 Enter Agreement, Off-BS Arrangement, Sale of Shares, Exhibits
8-K 2018-01-17 Enter Agreement, Off-BS Arrangement, Sale of Shares, Regulation FD, Exhibits
8-K 2018-01-16 Other Events, Exhibits
8-K 2018-01-10 Regulation FD, Exhibits
PATK 2019-09-29
Part 1: Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part Ii: Other Information
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 patk2019q3ex311transit.htm
EX-31.2 patk2019q3ex312transit.htm
EX-32 patk2019q3ex32transiti.htm

Patrick Industries Earnings 2019-09-29

PATK 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
TREX 4,194 536 145 692 280 122 194 4,088 40% 21.0 23%
LPX 3,322 2,090 812 2,496 465 185 362 3,311 19% 9.2 9%
UFPI 2,228 1,851 667 4,489 637 165 301 2,394 14% 8.0 9%
JELD 2,123 3,414 2,625 4,358 918 107 283 3,570 21% 12.6 3%
AMWD 1,430 1,623 972 1,644 345 86 203 2,006 21% 9.9 5%
DOOR 1,324 1,926 1,311 2,179 447 69 231 1,997 21% 8.7 4%
PATK 1,081 1,331 872 2,328 423 103 232 1,664 18% 7.2 8%
KOP 629 1,598 1,495 1,773 332 32 168 1,606 19% 9.6 2%
OSB
EVA 960 706 639 81 10 91 521 13% 5.7 1%

Document
false--12-31Q320190000076605PATRICK INDUSTRIES INCP1YP3YP3M2590000018600000319000004100000199000000.01137850.052536000000P1Y6M8000000002800000280000083000001098000036.50982010 0000076605 2019-01-01 2019-09-30 0000076605 2019-10-25 0000076605 2018-12-31 0000076605 2019-09-30 0000076605 2018-01-01 2018-09-30 0000076605 2019-07-01 2019-09-30 0000076605 2018-07-02 2018-09-30 0000076605 us-gaap:RetainedEarningsMember 2018-07-02 2018-09-30 0000076605 us-gaap:CommonStockMember 2017-12-31 0000076605 us-gaap:CommonStockMember 2018-01-01 2018-09-30 0000076605 us-gaap:RetainedEarningsMember 2019-01-01 2019-09-30 0000076605 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0000076605 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-30 0000076605 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0000076605 us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2019-09-30 0000076605 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0000076605 us-gaap:CommonStockMember 2019-06-30 0000076605 us-gaap:CommonStockMember 2018-07-02 2018-09-30 0000076605 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0000076605 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-09-30 0000076605 2017-12-31 0000076605 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-09-30 0000076605 2018-07-01 0000076605 us-gaap:AdditionalPaidInCapitalMember 2018-07-01 0000076605 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0000076605 us-gaap:RetainedEarningsMember 2017-12-31 0000076605 2018-09-30 0000076605 us-gaap:CommonStockMember 2018-09-30 0000076605 us-gaap:RetainedEarningsMember 2019-06-30 0000076605 us-gaap:RetainedEarningsMember 2019-09-30 0000076605 us-gaap:RetainedEarningsMember 2018-01-01 2018-09-30 0000076605 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-30 0000076605 us-gaap:CommonStockMember 2019-09-30 0000076605 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-07-01 0000076605 us-gaap:AdditionalPaidInCapitalMember 2018-09-30 0000076605 us-gaap:CommonStockMember 2019-01-01 2019-09-30 0000076605 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000076605 us-gaap:RetainedEarningsMember 2018-07-01 0000076605 us-gaap:CommonStockMember 2019-07-01 2019-09-30 0000076605 2019-06-30 0000076605 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0000076605 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-07-02 2018-09-30 0000076605 us-gaap:AdditionalPaidInCapitalMember 2018-07-02 2018-09-30 0000076605 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000076605 us-gaap:RetainedEarningsMember 2018-09-30 0000076605 us-gaap:RetainedEarningsMember 2018-12-31 0000076605 us-gaap:CommonStockMember 2018-07-01 0000076605 us-gaap:CommonStockMember 2018-12-31 0000076605 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-09-30 0000076605 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-09-30 0000076605 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-07-01 2019-09-30 0000076605 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0000076605 patk:ManufacturedHousingMember patk:ManufacturingMember 2018-01-01 2018-09-30 0000076605 patk:DistributionMember 2018-01-01 2018-09-30 0000076605 patk:ManufacturingMember 2018-01-01 2018-09-30 0000076605 patk:IndustrialMember patk:ManufacturingMember 2018-01-01 2018-09-30 0000076605 patk:RecreationalVehicleMember 2018-01-01 2018-09-30 0000076605 patk:MarineMember patk:DistributionMember 2018-01-01 2018-09-30 0000076605 patk:MarineMember 2018-01-01 2018-09-30 0000076605 patk:ManufacturedHousingMember 2018-01-01 2018-09-30 0000076605 patk:RecreationalVehicleMember patk:DistributionMember 2018-01-01 2018-09-30 0000076605 patk:ManufacturedHousingMember patk:DistributionMember 2018-01-01 2018-09-30 0000076605 patk:MarineMember patk:ManufacturingMember 2018-01-01 2018-09-30 0000076605 patk:IndustrialMember 2018-01-01 2018-09-30 0000076605 patk:RecreationalVehicleMember patk:ManufacturingMember 2018-01-01 2018-09-30 0000076605 patk:IndustrialMember patk:DistributionMember 2018-01-01 2018-09-30 0000076605 patk:MarineMember patk:DistributionMember 2019-07-01 2019-09-30 0000076605 patk:DistributionMember 2019-07-01 2019-09-30 0000076605 patk:ManufacturingMember 2019-07-01 2019-09-30 0000076605 patk:ManufacturedHousingMember patk:ManufacturingMember 2019-07-01 2019-09-30 0000076605 patk:IndustrialMember 2019-07-01 2019-09-30 0000076605 patk:ManufacturedHousingMember 2019-07-01 2019-09-30 0000076605 patk:RecreationalVehicleMember patk:DistributionMember 2019-07-01 2019-09-30 0000076605 patk:MarineMember 2019-07-01 2019-09-30 0000076605 patk:RecreationalVehicleMember 2019-07-01 2019-09-30 0000076605 patk:RecreationalVehicleMember patk:ManufacturingMember 2019-07-01 2019-09-30 0000076605 patk:MarineMember patk:ManufacturingMember 2019-07-01 2019-09-30 0000076605 patk:ManufacturedHousingMember patk:DistributionMember 2019-07-01 2019-09-30 0000076605 patk:IndustrialMember patk:ManufacturingMember 2019-07-01 2019-09-30 0000076605 patk:IndustrialMember patk:DistributionMember 2019-07-01 2019-09-30 0000076605 patk:IndustrialMember patk:DistributionMember 2019-01-01 2019-09-30 0000076605 patk:ManufacturedHousingMember patk:ManufacturingMember 2019-01-01 2019-09-30 0000076605 patk:RecreationalVehicleMember patk:DistributionMember 2019-01-01 2019-09-30 0000076605 patk:ManufacturingMember 2019-01-01 2019-09-30 0000076605 patk:ManufacturedHousingMember patk:DistributionMember 2019-01-01 2019-09-30 0000076605 patk:MarineMember patk:DistributionMember 2019-01-01 2019-09-30 0000076605 patk:RecreationalVehicleMember 2019-01-01 2019-09-30 0000076605 patk:ManufacturedHousingMember 2019-01-01 2019-09-30 0000076605 patk:IndustrialMember patk:ManufacturingMember 2019-01-01 2019-09-30 0000076605 patk:RecreationalVehicleMember patk:ManufacturingMember 2019-01-01 2019-09-30 0000076605 patk:MarineMember patk:ManufacturingMember 2019-01-01 2019-09-30 0000076605 patk:MarineMember 2019-01-01 2019-09-30 0000076605 patk:DistributionMember 2019-01-01 2019-09-30 0000076605 patk:IndustrialMember 2019-01-01 2019-09-30 0000076605 patk:ManufacturedHousingMember patk:DistributionMember 2018-07-02 2018-09-30 0000076605 patk:MarineMember patk:DistributionMember 2018-07-02 2018-09-30 0000076605 patk:MarineMember patk:ManufacturingMember 2018-07-02 2018-09-30 0000076605 patk:RecreationalVehicleMember patk:ManufacturingMember 2018-07-02 2018-09-30 0000076605 patk:IndustrialMember patk:ManufacturingMember 2018-07-02 2018-09-30 0000076605 patk:IndustrialMember 2018-07-02 2018-09-30 0000076605 patk:IndustrialMember patk:DistributionMember 2018-07-02 2018-09-30 0000076605 patk:ManufacturedHousingMember 2018-07-02 2018-09-30 0000076605 patk:RecreationalVehicleMember patk:DistributionMember 2018-07-02 2018-09-30 0000076605 patk:ManufacturedHousingMember patk:ManufacturingMember 2018-07-02 2018-09-30 0000076605 patk:RecreationalVehicleMember 2018-07-02 2018-09-30 0000076605 patk:DistributionMember 2018-07-02 2018-09-30 0000076605 patk:MarineMember 2018-07-02 2018-09-30 0000076605 patk:ManufacturingMember 2018-07-02 2018-09-30 0000076605 patk:ManufacturedGoodsMember 2018-12-31 0000076605 patk:DistributedGoodsMember 2018-12-31 0000076605 patk:DistributedGoodsMember 2019-09-30 0000076605 patk:ManufacturedGoodsMember 2019-09-30 0000076605 us-gaap:CustomerRelationshipsMember 2018-12-31 0000076605 us-gaap:CustomerRelationshipsMember 2019-01-01 2019-09-30 0000076605 us-gaap:TrademarksMember 2019-09-30 0000076605 us-gaap:NoncompeteAgreementsMember 2019-01-01 2019-09-30 0000076605 us-gaap:NoncompeteAgreementsMember 2019-09-30 0000076605 us-gaap:NoncompeteAgreementsMember 2018-12-31 0000076605 us-gaap:TrademarksMember 2018-12-31 0000076605 us-gaap:PatentsMember 2019-01-01 2019-09-30 0000076605 us-gaap:PatentsMember 2018-01-01 2018-12-31 0000076605 us-gaap:NoncompeteAgreementsMember 2018-01-01 2018-12-31 0000076605 us-gaap:CustomerRelationshipsMember 2018-01-01 2018-12-31 0000076605 us-gaap:PatentsMember 2019-09-30 0000076605 us-gaap:CustomerRelationshipsMember 2019-09-30 0000076605 us-gaap:PatentsMember 2018-12-31 0000076605 patk:DistributionMember 2019-09-30 0000076605 patk:ManufacturingMember 2019-09-30 0000076605 patk:ManufacturingMember 2018-12-31 0000076605 patk:DistributionMember 2018-12-31 0000076605 patk:AcquiredEntitiesMember 2018-07-02 2018-09-30 0000076605 patk:EngineeredMetalsAndCompositesMember 2018-01-01 2018-12-31 0000076605 patk:CollinsCompanyMember 2019-01-01 2019-09-30 0000076605 patk:IndianaMarineProductsMember 2018-03-01 2018-03-31 0000076605 patk:DehcoIncMember 2018-04-02 2018-04-30 0000076605 patk:DehcoIncMember 2019-01-01 2019-09-30 0000076605 patk:LaSalleBristolMember 2018-01-01 2018-12-31 0000076605 patk:G.G.SchmittSonsInc.Domain 2018-02-28 0000076605 patk:DowcoInc.Member 2018-01-01 2018-12-31 0000076605 patk:AluminumMetalsCompanyMember 2018-02-01 2018-02-28 0000076605 us-gaap:OtherNoncurrentLiabilitiesMember 2019-09-30 0000076605 patk:MarineAccessoriesCorporationMember 2018-01-01 2018-12-31 0000076605 patk:MarineAccessoriesCorporationMember 2018-06-01 2018-06-30 0000076605 patk:MetalMouldingCorporationMember 2018-02-28 0000076605 patk:LaSalleBristolMember 2018-11-01 2018-11-30 0000076605 us-gaap:AccruedLiabilitiesMember 2019-09-30 0000076605 patk:DowcoInc.Member 2018-05-01 2018-05-31 0000076605 patk:CollinsCompanyMember 2018-03-01 2018-03-31 0000076605 patk:G.G.SchmittSonsInc.Domain 2019-09-01 2019-09-30 0000076605 patk:AcquiredEntitiesMember 2018-01-01 2018-09-30 0000076605 patk:MetalMouldingCorporationMember 2018-02-01 2018-02-28 0000076605 patk:MarineAccessoriesCorporationMember 2018-06-30 0000076605 us-gaap:OtherNoncurrentLiabilitiesMember 2018-12-31 0000076605 patk:EngineeredMetalsAndCompositesMember 2018-09-01 2018-09-30 0000076605 patk:EngineeredMetalsAndCompositesMember 2018-09-30 0000076605 us-gaap:AccruedLiabilitiesMember 2018-12-31 0000076605 patk:IndianaMarineProductsMember 2018-03-31 0000076605 patk:LaSalleBristolMember 2018-11-30 0000076605 patk:DehcoIncMember 2018-04-30 0000076605 patk:AluminumMetalsCompanyMember 2018-02-28 0000076605 patk:DowcoInc.Member 2018-05-31 0000076605 patk:AcquiredEntitiesMember 2018-12-31 0000076605 patk:CollinsCompanyMember 2018-03-31 0000076605 patk:AcquiredEntitiesMember 2019-09-30 0000076605 us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember 2018-12-31 0000076605 patk:EngineeredMetalsAndCompositesMember 2019-01-01 2019-09-30 0000076605 patk:LaSalleBristolMember 2019-01-01 2019-09-30 0000076605 patk:A7.50SeniorNotesDue2027Domain us-gaap:SeniorNotesMember 2019-09-17 2019-09-17 0000076605 patk:ConvertibleSeniorNotesDue2023Member us-gaap:ConvertibleDebtMember 2018-12-31 0000076605 us-gaap:RevolvingCreditFacilityMember patk:A2019CreditFacilityDomain us-gaap:LineOfCreditMember 2019-09-17 0000076605 srt:MinimumMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-09-17 2019-09-17 0000076605 patk:A2018CreditFacilityMember patk:TermLoanMember 2018-06-05 0000076605 us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-09-30 0000076605 patk:A2019CreditFacilityDomain patk:September302021andThereafterDomain patk:TermLoanMember 2019-01-01 2019-09-30 0000076605 us-gaap:RevolvingCreditFacilityMember patk:A2018CreditFacilityMember us-gaap:LineOfCreditMember 2018-06-05 0000076605 patk:A7.50SeniorNotesDue2027Domain us-gaap:SeniorNotesMember 2019-09-17 0000076605 srt:MinimumMember us-gaap:BaseRateMember 2019-09-17 2019-09-17 0000076605 us-gaap:RevolvingCreditFacilityMember patk:A2019CreditFacilityDomain us-gaap:LineOfCreditMember 2019-09-30 0000076605 patk:ConvertibleSeniorNotesDue2023Member us-gaap:ConvertibleDebtMember 2018-01-31 0000076605 srt:MaximumMember 2019-09-17 2019-09-17 0000076605 srt:MaximumMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-09-17 2019-09-17 0000076605 patk:A2019CreditFacilityDomain patk:TermLoanMember 2019-09-17 2019-09-17 0000076605 patk:A2019CreditFacilityDomain patk:September302019throughJune302021Domain patk:TermLoanMember 2019-01-01 2019-09-30 0000076605 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-09-30 0000076605 us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-09-30 0000076605 patk:A7.50SeniorNotesDue2027Domain 2019-09-17 2019-09-17 0000076605 srt:MaximumMember us-gaap:BaseRateMember 2019-09-17 2019-09-17 0000076605 patk:ConvertibleSeniorNotesDue2023Member us-gaap:ConvertibleDebtMember 2019-09-30 0000076605 us-gaap:RevolvingCreditFacilityMember patk:A2019CreditFacilityDomain us-gaap:LineOfCreditMember 2019-01-01 2019-09-30 0000076605 patk:A2019CreditFacilityDomain patk:TermLoanMember 2019-09-17 0000076605 srt:MaximumMember patk:A7.50SeniorNotesDue2027Domain us-gaap:SeniorNotesMember 2019-09-17 2019-09-17 0000076605 patk:A2018CreditFacilityMember patk:TermLoanMember 2019-09-17 2019-09-17 0000076605 patk:TermLoanMember 2019-09-30 0000076605 srt:MinimumMember 2019-09-17 2019-09-17 0000076605 us-gaap:RevolvingCreditFacilityMember 2019-01-01 2019-09-30 0000076605 us-gaap:LineOfCreditMember 2019-09-30 0000076605 us-gaap:LineOfCreditMember 2018-12-31 0000076605 us-gaap:ConvertibleDebtMember 2019-09-30 0000076605 patk:A7.50SeniorNotesDue2027Domain us-gaap:SeniorNotesMember 2019-09-30 0000076605 us-gaap:ConvertibleDebtMember 2018-12-31 0000076605 patk:TermLoanMember 2018-12-31 0000076605 patk:A7.50SeniorNotesDue2027Domain us-gaap:SeniorNotesMember 2018-12-31 0000076605 patk:ConvertibleSeniorNotesDue2023Member us-gaap:ConvertibleDebtMember 2018-01-01 2018-01-31 0000076605 us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-09-30 0000076605 us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000076605 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2018-09-30 0000076605 us-gaap:AccumulatedTranslationAdjustmentMember 2018-09-30 0000076605 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-07-01 0000076605 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2018-07-02 2018-09-30 0000076605 us-gaap:AccumulatedTranslationAdjustmentMember 2018-07-02 2018-09-30 0000076605 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-09-30 0000076605 us-gaap:AccumulatedTranslationAdjustmentMember 2018-07-01 0000076605 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-07-02 2018-09-30 0000076605 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2018-07-01 0000076605 us-gaap:AccumulatedTranslationAdjustmentMember 2017-12-31 0000076605 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-01-01 2018-09-30 0000076605 us-gaap:AccumulatedTranslationAdjustmentMember 2018-01-01 2018-09-30 0000076605 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2017-12-31 0000076605 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2018-01-01 2018-09-30 0000076605 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2017-12-31 0000076605 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-09-30 0000076605 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-01-01 2019-09-30 0000076605 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-09-30 0000076605 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-01-01 2019-09-30 0000076605 us-gaap:AccumulatedTranslationAdjustmentMember 2018-12-31 0000076605 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-12-31 0000076605 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2018-12-31 0000076605 us-gaap:AccumulatedTranslationAdjustmentMember 2019-01-01 2019-09-30 0000076605 us-gaap:AccumulatedTranslationAdjustmentMember 2019-09-30 0000076605 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-06-30 0000076605 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-06-30 0000076605 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-07-01 2019-09-30 0000076605 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-07-01 2019-09-30 0000076605 us-gaap:AccumulatedTranslationAdjustmentMember 2019-07-01 2019-09-30 0000076605 us-gaap:AccumulatedTranslationAdjustmentMember 2019-06-30 0000076605 srt:MaximumMember 2019-09-30 0000076605 srt:MinimumMember 2019-09-30 0000076605 patk:ConvertibleSeniorNotesDue2023Member us-gaap:FairValueInputsLevel2Member us-gaap:ConvertibleDebtMember 2019-09-30 0000076605 patk:ConvertibleSeniorNotesDue2023Member us-gaap:FairValueInputsLevel2Member us-gaap:ConvertibleDebtMember 2018-12-31 0000076605 us-gaap:OperatingSegmentsMember patk:DistributionMember 2018-01-01 2018-09-30 0000076605 us-gaap:IntersegmentEliminationMember patk:ManufacturingMember 2018-01-01 2018-09-30 0000076605 us-gaap:OperatingSegmentsMember patk:ManufacturingMember 2018-01-01 2018-09-30 0000076605 us-gaap:OperatingSegmentsMember 2018-01-01 2018-09-30 0000076605 us-gaap:IntersegmentEliminationMember 2018-01-01 2018-09-30 0000076605 us-gaap:IntersegmentEliminationMember patk:DistributionMember 2018-01-01 2018-09-30 0000076605 us-gaap:IntersegmentEliminationMember patk:ManufacturingMember 2019-01-01 2019-09-30 0000076605 us-gaap:OperatingSegmentsMember patk:ManufacturingMember 2019-01-01 2019-09-30 0000076605 us-gaap:IntersegmentEliminationMember patk:DistributionMember 2019-01-01 2019-09-30 0000076605 us-gaap:OperatingSegmentsMember 2019-01-01 2019-09-30 0000076605 us-gaap:OperatingSegmentsMember patk:DistributionMember 2019-01-01 2019-09-30 0000076605 us-gaap:IntersegmentEliminationMember 2019-01-01 2019-09-30 0000076605 us-gaap:OperatingSegmentsMember 2018-07-02 2018-09-30 0000076605 us-gaap:IntersegmentEliminationMember patk:DistributionMember 2018-07-02 2018-09-30 0000076605 us-gaap:IntersegmentEliminationMember 2018-07-02 2018-09-30 0000076605 us-gaap:OperatingSegmentsMember patk:ManufacturingMember 2018-07-02 2018-09-30 0000076605 us-gaap:OperatingSegmentsMember patk:DistributionMember 2018-07-02 2018-09-30 0000076605 us-gaap:IntersegmentEliminationMember patk:ManufacturingMember 2018-07-02 2018-09-30 0000076605 us-gaap:MaterialReconcilingItemsMember 2018-01-01 2018-09-30 0000076605 us-gaap:MaterialReconcilingItemsMember 2019-01-01 2019-09-30 0000076605 us-gaap:MaterialReconcilingItemsMember 2018-07-02 2018-09-30 0000076605 us-gaap:MaterialReconcilingItemsMember 2019-07-01 2019-09-30 0000076605 us-gaap:OperatingSegmentsMember 2019-07-01 2019-09-30 0000076605 us-gaap:IntersegmentEliminationMember patk:ManufacturingMember 2019-07-01 2019-09-30 0000076605 us-gaap:IntersegmentEliminationMember 2019-07-01 2019-09-30 0000076605 us-gaap:OperatingSegmentsMember patk:ManufacturingMember 2019-07-01 2019-09-30 0000076605 us-gaap:OperatingSegmentsMember patk:DistributionMember 2019-07-01 2019-09-30 0000076605 us-gaap:IntersegmentEliminationMember patk:DistributionMember 2019-07-01 2019-09-30 0000076605 patk:BoardMemberMember 2019-09-30 0000076605 patk:DNAEnterpriseIncMember 2019-01-01 2019-09-30 0000076605 patk:WelchPackagingGroupMember 2019-01-01 2019-09-30 patk:facility patk:acquisition xbrli:pure iso4217:USD iso4217:USD xbrli:shares xbrli:shares patk:employee patk:segment


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED September 29, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ……………… to ………………
 
Commission file number 000-03922
 
PATRICK INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana
35-1057796
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
                                                             
107 WEST FRANKLIN STREET, P.O. Box 638
ELKHART,
IN
             46515
                  (Address of principal executive offices) 
         (ZIP Code)
 (574) 294-7511
(Registrant’s telephone number, including area code)
         (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 No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.                             
Large accelerated filer
Accelerated filer
 
Non-accelerated filer
 
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).         Yes  No
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
 Common Stock, no par value
 PATK
NASDAQ
As of October 25, 2019, there were 23,764,458 shares of the registrant’s common stock outstanding. 




PATRICK INDUSTRIES, INC.

 TABLE OF CONTENTS 

 
Page No.
PART I. FINANCIAL INFORMATION
 
 
 
ITEM 1. FINANCIAL STATEMENTS (Unaudited)
 
 
 
Condensed Consolidated Statements of Financial Position
    September 29, 2019 and December 31, 2018
 
 
Condensed Consolidated Statements of Income
    Third Quarter and Nine Months Ended September 29, 2019 and September 30, 2018
 
 
Condensed Consolidated Statements of Comprehensive Income
    Third Quarter and Nine Months Ended September 29, 2019 and September 30, 2018
 
 
Condensed Consolidated Statements of Shareholders' Equity
    Third Quarter and Nine Months Ended September 29, 2019 and September 30, 2018
 
 
Condensed Consolidated Statements of Cash Flows
    Nine Months Ended September 29, 2019 and September 30, 2018
 
 
Notes to Condensed Consolidated Financial Statements
 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 
ITEM 4. CONTROLS AND PROCEDURES
 
 
PART II. OTHER INFORMATION
 
 
 
ITEM 1A. RISK FACTORS
 
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
 
ITEM 6. EXHIBITS
 
 
SIGNATURES

2



PART 1: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
 

As of
(thousands)

September 29, 2019

December 31, 2018
ASSETS

 

 
Current Assets

 

 
    Cash and cash equivalents

$
116,712


$
6,895

    Trade and other receivables, net

129,837


82,499

    Inventories

262,558


272,898

    Prepaid expenses and other

18,897


22,875

        Total current assets

528,004


385,167

Property, plant and equipment, net

179,884


177,145

Operating lease right-of-use assets
 
81,064

 

Goodwill

308,358


281,734

Intangible assets, net

350,216


382,982

Deferred financing costs, net

3,130


3,688

Other non-current assets

474


515

        TOTAL ASSETS
 
$
1,451,130


$
1,231,231

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 
Current Liabilities

 

 
    Current maturities of long-term debt

$
5,000


$
8,750

    Current operating lease liabilities
 
25,990

 

    Accounts payable

117,862


89,803

    Accrued liabilities

53,423


59,202

        Total current liabilities

202,275


157,755

Long-term debt, less current maturities, net

670,928


621,751

Long-term operating lease liabilities
 
55,553

 

Deferred tax liabilities, net

19,735


22,699

Other long-term liabilities

22,701


20,272

        TOTAL LIABILITIES

971,192


822,477

SHAREHOLDERS’ EQUITY

 

 
Common stock

169,220


161,436

Additional paid-in-capital

25,020


25,124

Accumulated other comprehensive loss

(5,953
)

(2,680
)
Retained earnings

291,651


224,874

        TOTAL SHAREHOLDERS’ EQUITY

479,938


408,754

        TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$
1,451,130


$
1,231,231


See accompanying Notes to Condensed Consolidated Financial Statements.


3



PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)



Third Quarter Ended
 
Nine Months Ended
(thousands except per share data)

September 29, 2019

September 30, 2018
 
September 29, 2019
 
September 30, 2018
NET SALES

$
566,186


$
575,139

 
$
1,787,622

 
$
1,731,850

Cost of goods sold

461,851


468,484

 
1,464,078

 
1,412,649

GROSS PROFIT

104,335


106,655

 
323,544

 
319,201

Operating Expenses:

 

 
 
 
 
 
  Warehouse and delivery

23,917


19,789

 
74,228

 
55,540

  Selling, general and administrative

33,817


33,284

 
104,403

 
98,999

  Amortization of intangible assets

9,191


8,873

 
26,448

 
25,140

    Total operating expenses

66,925


61,946

 
205,079

 
179,679

OPERATING INCOME

37,410


44,709

 
118,465

 
139,522

Interest expense, net

8,603


7,338

 
26,222

 
17,980

Income before income taxes

28,807


37,371

 
92,243

 
121,542

Income taxes

7,490


9,437

 
22,661

 
28,680

NET INCOME

$
21,317


$
27,934

 
$
69,582

 
$
92,862








 
 
 
 
BASIC NET INCOME PER COMMON SHARE

$
0.92


$
1.17

 
$
3.02

 
$
3.82

DILUTED NET INCOME PER COMMON SHARE

$
0.92


$
1.15

 
$
2.99

 
$
3.77








 
 
 
 
Weighted average shares outstanding – Basic

23,076


23,894

 
23,073

 
24,279

Weighted average shares outstanding – Diluted

23,273


24,232

 
23,279

 
24,619

 
 
 
 
 
 
 
 
 
See accompanying Notes to Condensed Consolidated Financial Statements.




4



PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

 
 
Third Quarter Ended
 
Nine Months Ended
(thousands)
 
September 29, 2019
 
September 30, 2018
 
September 29, 2019
 
September 30, 2018
NET INCOME
 
$
21,317

 
$
27,934

 
$
69,582

 
$
92,862

Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
 
Unrealized (loss) gain of hedge derivatives
 
(240
)
 
80

 
(3,225
)
 
80

Foreign currency translation gain (loss)
 
19

 
(28
)
 
(48
)
 
(31
)
Total other comprehensive (loss) gain
 
(221
)
 
52

 
(3,273
)
 
49

COMPREHENSIVE INCOME
 
$
21,096

 
$
27,986

 
$
66,309

 
$
92,911


See accompanying Notes to Condensed Consolidated Financial Statements.


5



PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
Third Quarter Ended September 29, 2019
(thousands)
 
Common
Stock
 
Additional
Paid-in-
Capital
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Retained
Earnings
 
Total
Balance June 30, 2019
 
$
166,086

 
$
25,124

 
$
(5,732
)
 
$
273,139

 
$
458,617

Net income
 

 

 

 
21,317

 
21,317

Other comprehensive loss, net of tax
 

 

 
(221
)
 

 
(221
)
Share repurchases under buyback program
 
(674
)
 
(104
)
 

 
(2,805
)
 
(3,583
)
Shares used to pay taxes on stock grants
 
(59
)
 

 

 

 
(59
)
  Stock-based compensation expense
 
3,867

 

 

 

 
3,867

Balance September 29, 2019
 
$
169,220

 
$
25,020

 
$
(5,953
)
 
$
291,651

 
$
479,938

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 29, 2019
(thousands)
 
Common
Stock
 
Additional
Paid-in-
Capital
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Retained
Earnings
 
Total
Balance December 31, 2018
 
$
161,436

 
$
25,124

 
$
(2,680
)
 
$
224,874

 
$
408,754

Net income
 

 

 

 
69,582

 
69,582

Other comprehensive loss, net of tax
 

 

 
(3,273
)
 

 
(3,273
)
Share repurchases under buyback program
 
(674
)
 
(104
)
 

 
(2,805
)
 
(3,583
)
Shares used to pay taxes on stock grants
 
(3,587
)
 

 

 

 
(3,587
)
Issuance of shares upon exercise of common stock options
 
6

 

 

 

 
6

  Stock-based compensation expense
 
12,039

 

 

 

 
12,039

Balance September 29, 2019
 
$
169,220

 
$
25,020

 
$
(5,953
)
 
$
291,651

 
$
479,938

 
 
 
 
 
 
 
 
 
 
 
Third Quarter Ended September 30, 2018
(thousands)
 
Common Stock
 
Additional Paid-in- Capital
 
Accumulated Other Comprehensive Income (Loss)
 
Retained Earnings
 
Total
Balance July 1, 2018
 
$
161,648

 
$
25,552

 
$
63

 
$
216,357

 
$
403,620

Net income
 

 

 

 
27,934

 
27,934

Other comprehensive income, net of tax
 

 

 
52

 

 
52

Stock repurchases under buyback program
 
(2,237
)
 
(113
)
 

 
(18,593
)
 
(20,943
)
Issuance of shares upon exercise of common stock options
 
(37
)
 

 

 

 
(37
)
Shares used to pay taxes on stock grants
 
9

 

 

 

 
9

Stock-based compensation expense
 
3,542

 

 

 

 
3,542

Equity component of convertible notes issuance
 

 
41

 

 

 
41

Balance September 30, 2018
 
$
162,925

 
$
25,480

 
$
115

 
$
225,698

 
$
414,218

 
 
 
 
 
 
 
 
 
 
 

6



PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (cont.)
Nine Months Ended September 30, 2018
(thousands)
 
Common Stock
 
Additional Paid-in- Capital
 
Accumulated Other Comprehensive Income (Loss)
 
Retained Earnings
 
Total
Balance December 31, 2017
 
$
163,196

 
$
8,243

 
$
66

 
$
199,180

 
$
370,685

Net income
 

 

 

 
92,862

 
92,862

Other comprehensive loss, net of tax
 

 

 
49

 

 
49

Stock repurchases under buyback program
 
(8,266
)
 
(418
)
 

 
(66,344
)
 
(75,028
)
Issuance of shares upon exercise of common stock options
 
3

 

 

 

 
3

Shares used to pay taxes on stock grants
 
(2,919
)
 

 

 

 
(2,919
)
Stock-based compensation expense
 
10,911

 

 

 

 
10,911

Purchase of convertible notes hedges
 

 
(31,481
)
 

 

 
(31,481
)
Proceeds from sale of warrants
 

 
18,147

 

 

 
18,147

Equity component of convertible notes issuance
 

 
30,989

 

 

 
30,989

Balance September 30, 2018
 
$
162,925

 
$
25,480

 
$
115

 
$
225,698

 
$
414,218


See accompanying Notes to Condensed Consolidated Financial Statements




7



PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 

Nine Months Ended
(thousands)

September 29, 2019

September 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
Net income

$
69,582


$
92,862

Adjustments to reconcile net income to net cash provided by operating activities:

 

 
Depreciation and amortization

46,449


39,893

Stock-based compensation expense

12,039


10,911

Amortization of convertible notes debt discount

5,123


4,495

Deferred income taxes

(794
)

(1,088
)
Other

235


(2,739
)
Change in operating assets and liabilities, net of acquisitions of businesses:

 

 
Trade receivables

(44,359
)

(29,295
)
Inventories

9,084


(13,238
)
Prepaid expenses and other assets

4,319


4,299

Accounts payable, accrued liabilities and other

20,355


21,313

Net cash provided by operating activities

122,033


127,413

CASH FLOWS FROM INVESTING ACTIVITIES

 

 
Capital expenditures

(22,227
)

(26,073
)
Proceeds from sale of property, equipment and other investing activities

4,509


5,125

Business acquisitions, net of cash acquired

(22,350
)

(290,052
)
Net cash used in investing activities

(40,068
)
 
(311,000
)
CASH FLOWS FROM FINANCING ACTIVITIES

 

 
Term debt borrowings

7,500


36,981

Term debt repayments

(3,750
)

(6,441
)
Borrowings on revolver

648,460


954,535

Repayments on revolver

(905,792
)

(877,931
)
Stock repurchases under buyback program

(3,583
)

(75,028
)
Proceeds from issuance of senior notes
 
300,000

 

Proceeds from convertible notes offering


 
172,500

Purchase of convertible notes hedges


 
(31,481
)
Proceeds from sale of warrants


 
18,147

Payments related to vesting of stock-based awards, net of shares tendered for taxes

(3,359
)
 
(2,659
)
Payment of deferred financing costs

(7,214
)
 
(7,485
)
Payment of contingent consideration from a business acquisition
 
(4,416
)
 

Other financing activities

6

 
(12
)
Net cash provided by financing activities

27,852

 
181,126

Increase (decrease) in cash and cash equivalents

109,817

 
(2,461
)
Cash and cash equivalents at beginning of year

6,895

 
2,767

Cash and cash equivalents at end of period

$
116,712

 
$
306

See accompanying Notes to Condensed Consolidated Financial Statements.


8




PATRICK INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 
1.
BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Patrick Industries, Inc. (“Patrick”, the “Company”, "we", "our") contain all adjustments (consisting of normal recurring adjustments) that we believe are necessary to present fairly the Company’s financial position as of September 29, 2019 and December 31, 2018, and its results of operations for the three and nine months ended September 29, 2019 and September 30, 2018 and cash flows for the nine months ended September 29, 2019 and September 30, 2018.
 
Patrick’s unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules or regulations. Certain immaterial reclassifications have been made to the prior period presentation to conform to the current period presentation. For a description of significant accounting policies used by the Company in the preparation of its consolidated financial statements, please refer to Note 2 to Notes to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The December 31, 2018 condensed consolidated statement of financial position data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Operating results for the third quarter and nine months ended September 29, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.

The Company maintains its financial records on the basis of a fiscal year ending on December 31, with the fiscal quarters spanning approximately thirteen weeks. The first quarter ends on the Sunday closest to the end of the first thirteen-week period. The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The third quarter of fiscal year 2019 ended on September 29, 2019 and the third quarter of fiscal year 2018 ended on September 30, 2018.
In preparation of Patrick’s condensed consolidated financial statements as of and for the three and nine months ended September 29, 2019, management evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date of issuance of the Form 10-Q that required recognition or disclosure in the condensed consolidated financial statements.

2.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Leases
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, "Leases (Topic 842)", which requires in part that an entity recognize lease assets and lease liabilities on its statement of financial position for leases that were previously classified as operating leases under U.S. GAAP.

In July 2018, the FASB issued ASU 2018-11, "Leases (Topic 842): Targeted Improvements", which offered practical expedient alternatives to the modified retrospective adoption of Accounting Standards Codification (“ASC”) 842.

The Company adopted ASC 842 effective January 1, 2019, and recorded approximately $80 million in lease right-of-use assets and corresponding lease liabilities, with no material impact on the condensed consolidated statement of shareholders' equity, income, comprehensive income or cash flows. See Note 12 for further information.




9



Goodwill Impairment
In January 2017, the FASB issued ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". This ASU simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. The standard requires that the impairment loss be measured as the excess of the reporting unit's carrying amount over its fair value. It eliminates the second step that requires the impairment to be measured between the implied value of a reporting unit's goodwill and its carrying value. The standard is effective for annual and any interim impairment tests for periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting standard, which will depend on the outcomes of future goodwill impairment tests.

Credit Losses
In June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments”, which amends certain provisions of ASC 326, “Financial Instruments-Credit Loss”. The ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held to maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. Additionally, entities will be required to disclose more information with respect to credit quality indicators, including information used to track credit quality by year of origination for most financing receivables. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years and will be applied as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period for which the guidance is effective. The Company does not expect that the adoption of the ASU will have a material effect on its condensed consolidated financial statements.
 3.
REVENUE RECOGNITION

In the following table, revenue from contracts with customers, net of intersegment sales, is disaggregated by market type and by reportable segments, consistent with how the Company believes the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors:
 
 
Third Quarter Ended September 29, 2019
(thousands)
 
Manufacturing
 
Distribution
 
Total Reportable Segments
Market type:
 
 
 
 
 
 
Recreational Vehicle
 
$
218,706

 
$
91,313

 
$
310,019

Manufactured Housing
 
44,159

 
64,959

 
109,118

Industrial
 
64,541

 
7,566

 
72,107

Marine
 
72,306

 
2,636

 
74,942

Total
 
$
399,712

 
$
166,474

 
$
566,186


 
 
Nine Months Ended September 29, 2019
(thousands)
 
Manufacturing
 
Distribution
 
Total Reportable Segments
Market type:
 
 
 
 
 
 
Recreational Vehicle
 
$
694,261

 
$
299,115

 
$
993,376

Manufactured Housing
 
131,101

 
193,975

 
325,076

Industrial
 
188,292

 
25,149

 
213,441

Marine
 
246,017

 
9,712

 
255,729

Total
 
$
1,259,671

 
$
527,951

 
$
1,787,622


10



 
 
Third Quarter Ended September 30, 2018
(thousands)
 
Manufacturing
 
Distribution
 
Total Reportable Segments
Market type:
 
 
 
 
 
 
Recreational Vehicle
 
$
262,936

 
$
91,637

 
$
354,573

Manufactured Housing
 
41,428

 
26,334

 
67,762

Industrial
 
63,429

 
8,906

 
72,335

Marine
 
77,421

 
3,048

 
80,469

Total
 
$
445,214

 
$
129,925

 
$
575,139

`

 
 
Nine Months Ended September 30, 2018
(thousands)
 
Manufacturing
 
Distribution
 
Total Reportable Segments
Market type:
 
 
 
 
 
 
Recreational Vehicle
 
$
847,944

 
$
280,082

 
$
1,128,026

Manufactured Housing
 
124,406

 
75,946

 
200,352

Industrial
 
186,890

 
25,701

 
212,591

Marine
 
184,848

 
6,033

 
190,881

Total
 
$
1,344,088

 
$
387,762

 
$
1,731,850



The following table provides information about contract balances:
(thousands)
September 29, 2019
 
December 31, 2018
Receivables, which are included in trade and other receivables, net
$
128,672

 
$
74,196

Contract liabilities
$
2,692

 
$
2,642


Significant changes in the contract liabilities balance during the nine months ended September 29, 2019 are as follows:
(thousands)
 
Contract Liabilities
Revenue recognized that was included in the contract liability balance at the beginning of the period
 
$
(1,006
)
Increases due to cash received, excluding amounts recognized as revenue during the period
 
$
1,056


4.
INVENTORIES
Inventories consist of the following:

11



(thousands)
 
September 29, 2019
 
December 31, 2018
Raw materials
 
$
172,775

 
$
164,408

Work in process
 
14,235

 
12,829

Finished goods
 
25,403

 
28,341

Less: reserve for inventory obsolescence
 
(10,258
)
 
(5,354
)
  Total manufactured goods, net
 
202,155

 
200,224

Materials purchased for resale (distribution products)
 
62,616

 
74,914

Less: reserve for inventory obsolescence
 
(2,213
)
 
(2,240
)
  Total materials purchased for resale (distribution products), net
 
60,403

 
72,674

Total inventories
 
$
262,558

 
$
272,898



5.
GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the nine months ended September 29, 2019 by segment are as follows:
(thousands)
 
Manufacturing
 
Distribution
 
Total
Balance - December 31, 2018
 
$
235,345

 
$
46,389

 
$
281,734

Acquisitions
 
7,177

 

 
7,177

Adjustments to preliminary purchase price allocations
 
8,428

 
11,019

 
19,447

Balance - September 29, 2019
 
$
250,950

 
$
57,408

 
$
308,358


Intangible assets, net consist of the following as of September 29, 2019 and December 31, 2018:
(thousands)

September 29,
2019

Weighted Average Useful Life
(in years)

December 31,
2018

Weighted Average Useful Life
(in years)
Customer relationships

$
348,947


10.1

$
366,228


10.1
Non-compete agreements

16,405


4.9

19,159


4.9
Patents

16,338


14.6

1,048


8.9
Trademarks
 
80,786

 
Indefinite
 
82,358

 
Indefinite
 

462,476


 

468,793


 
Less: accumulated amortization

(112,260
)



(85,811
)

 
Intangible assets, net

$
350,216


 

$
382,982


 

Changes in the carrying value of intangible assets for the nine months ended September 29, 2019 by segment are as follows:
(thousands)

Manufacturing

Distribution

Total
Balance - December 31, 2018

$
304,485


$
78,497


$
382,982

Acquisitions

8,329




8,329

Amortization

(21,808
)

(4,640
)

(26,448
)
Adjustments to preliminary purchase price allocations

(12,023
)

(2,624
)

(14,647
)
Balance - September 29, 2019

$
278,983


$
71,233


$
350,216




12



6.
ACQUISITIONS
 
General 
In addition to the acquisitions completed in 2018 as discussed below, the Company completed two acquisitions in the first nine months of 2019. For the third quarter and first nine months ended September 29, 2019, revenue and operating income included in the Company's condensed consolidated statements of income related to the 2019 acquisitions were immaterial. For the third quarter ended September 30, 2018, revenue and operating income of approximately $82.4 million and $8.8 million, respectively, were included in the Company’s condensed consolidated statements of income relating to the businesses acquired in the first nine months of 2018. The first nine months of 2018 included revenue and operating income of approximately $160.0 million and $17.3 million, respectively, related to these acquisitions. Acquisition-related costs in the aggregate associated with the businesses acquired in the first nine months of 2019 and 2018 were immaterial.

Contingent Consideration
In connection with certain acquisitions, if certain financial targets for the acquired businesses are achieved, the Company will be required to pay additional cash consideration. The Company has recorded a liability for the fair value of the contingent consideration related to each of these acquisitions as part of the initial purchase price based on the present value of the expected future cash flows and the probability of future payments. As required, the liabilities for the contingent consideration associated with each of these acquisitions will be remeasured quarterly at fair value.

As of September 29, 2019, the aggregate fair value of the estimated contingent consideration payments was $12.0 million, $4.5 million of which is included in the line item "Accrued liabilities" and $7.5 million is included in “Other long-term liabilities” on the condensed consolidated statement of financial position. At December 31, 2018, the aggregate fair value of the estimated contingent consideration payments was $13.8 million, $4.4 million of which was included in the line item "Accrued liabilities" and $9.4 million was included in "Other long-term liabilities". The liabilities for contingent consideration expire at various dates through December 2023. The contingent consideration arrangements are subject to a maximum payment amount of up to $17.2 million in the aggregate. In the first quarter of 2019, the Company made cash payments of approximately $4.4 million related to contingent consideration liabilities, recording a corresponding reduction to accrued liabilities.

2019 Acquisitions
The Company completed two acquisitions in the third quarter and first nine months ended September 29, 2019, including the previously announced acquisition of G.G. Schmitt & Sons, Inc. ("G.G. Schmitt"), a Sarasota, Florida-based designer and manufacturer of customized hardware and structural components for the marine industry. The total initial consideration for these acquisitions was $21.1 million, plus subsequent contingent consideration payments over a one-year period based on future performance in connection with the acquisition of G.G. Schmitt. The preliminary purchase price allocation is subject to final review and approval, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its fair value estimates.
 
The results of operations for these acquisitions are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from their respective dates of acquisition.

2018 Acquisitions
Metal Moulding Corporation (MMC”)
In February 2018, the Company completed the acquisition of the business and certain assets of Madison, Tennessee-based MMC, a manufacturer of custom metal fabricated products, primarily for the marine market, including hinges, arm rests, brackets, panels and trim, as well as plastic products including boxes, inlay tables, steps, and related components, for a net initial purchase price of $19.9 million, plus contingent consideration payments over a one-year period based on future performance.

The results of operations for MMC are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from the date of acquisition.

13




Aluminum Metals Company, LLC (“AMC”)
In February 2018, the Company completed the acquisition of the business and certain assets of Elkhart, Indiana-based AMC, a manufacturer of aluminum products including coil, fabricated sheets and extrusions, in addition to roofing products, primarily for the recreational vehicle (“RV”), industrial, and marine markets, for a net purchase price of $17.8 million.
The results of operations for AMC are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from the date of acquisition.
IMP Holdings, LLC d/b/a Indiana Marine Products (“IMP”)
In March 2018, the Company completed the acquisition of the business and certain assets of Angola, Indiana-based IMP, a manufacturer of fully-assembled helm assemblies, including electrical wiring harnesses, dash panels, instrumentation and gauges, and other products primarily for the marine market, for a net initial purchase price of $18.6 million, plus subsequent contingent consideration payments over a three-year period based on future performance.
The results of operations for IMP are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from the date of acquisition.
Collins & Company, Inc. (“Collins”)
In March 2018, the Company completed the acquisition of the business and certain assets of Bristol, Indiana-based Collins, a distributor of appliances, trim products, fuel systems, flooring, tile, and other related building materials primarily to the RV market as well as the housing and industrial markets, for a net purchase price of $40.0 million.
The results of operations for Collins are included in the Company’s condensed consolidated financial statements and the Distribution operating segment from the date of acquisition. Changes from previously reported estimated amounts as of December 31, 2018 include a decrease to intangible assets of $3.6 million and a $3.6 million offsetting increase to goodwill. There was no material impact to the condensed consolidated statement of income related to these changes in the period in which the purchase price allocation and all purchase accounting adjustments were finalized.
Dehco, Inc. (“Dehco”)
In April 2018, the Company completed the acquisition of Dehco, a distributor and manufacturer of flooring, kitchen and bath products, adhesives and sealants, electronics, appliances and accessories, LP tanks, and other related building materials, primarily for the RV market as well as the manufactured housing (“MH”), marine and other industrial markets, for a net purchase price of $52.8 million. Dehco has operating facilities in Indiana, Oregon, Pennsylvania and Alabama.
The results of operations for Dehco are included in the Company’s condensed consolidated financial statements and the Manufacturing and Distribution operating segments from the date of acquisition. Changes from previously reported estimated amounts as of December 31, 2018 include a decrease to intangible assets of $0.3 million and a $0.3 million offsetting increase to goodwill. There was no material impact to the condensed consolidated statement of income related to these changes in the period in which the purchase price allocation and all purchase accounting adjustments were finalized.
Dowco, Inc. (“Dowco”)
In May 2018, the Company completed the acquisition of Dowco, a designer and manufacturer of custom designed boat covers and bimini tops, full boat enclosures, mounting hardware, and other accessories and components for the marine market, for a net purchase price of $56.3 million, net of cash acquired. Dowco has operating facilities in Wisconsin, Missouri, Indiana, and Minnesota.
The results of operations for Dowco are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from the date of acquisition. Changes from previously reported estimated amounts as of December 31, 2018 include a $2.7 million increase to property, plant and equipment and a $3.3 million increase to goodwill, offset by a $5.9 million decrease to intangible assets and a $0.1 million increase in accounts payable and accrued liabilities. There was no material impact to the condensed consolidated statement of income related to these changes in the period in which the purchase price allocation and all purchase accounting adjustments were finalized.

14



Marine Accessories Corporation (“MAC”)
In June 2018, the Company acquired 100% of the membership interests of Maryville, Tennessee-based MAC, a manufacturer, distributor and aftermarket supplier of custom tower and canvas products and other related accessories to OEMs, dealers, retailers and distributors within the marine market, as well as direct to consumers, for a net purchase price of $57.0 million, net of cash acquired.
The results of operations for MAC are included in the Company’s condensed consolidated financial statements and the Manufacturing and Distribution operating segments from the date of acquisition. Changes from previously reported estimated amounts as of December 31, 2018 include a $6.5 million decrease to intangible assets and a $1.0 million decrease to property, plant and equipment, offset by a decrease in deferred taxes and other liabilities of $1.1 million and an increase to goodwill of $6.4 million. There was no material impact to the condensed consolidated statement of income related to these changes in the period in which the purchase price allocation and all purchase accounting adjustments were finalized.
Engineered Metals and Composites, Inc. (“EMC”)
In September 2018, the Company completed the acquisition of the business and certain assets of West Columbia, South Carolina-based EMC, a designer and manufacturer of custom marine towers, frames, and other fabricated component products for OEMs in the marine industry, for a net initial purchase price of $25.3 million, plus contingent consideration over a three-month period based on future performance.
The results of operations for EMC are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from the date of acquisition. After adjusting for a $0.1 million increase to the estimated purchase price reported at December 31, 2018 due to a final working capital adjustment of $0.1 million, changes from previously reported estimated amounts as of December 31, 2018 include an increase to intangible assets of $1.6 million, an increase to inventory of $0.1 million, a decrease to property, plant and equipment of $0.8 million, a decrease to goodwill of $0.6 million and an increase to accounts payable of $0.2 million. There was no material impact to the condensed consolidated statement of income related to these changes in the period in which the purchase price allocation and all purchase accounting adjustments were finalized.
LaSalle Bristol (“LaSalle”)
In November 2018, the Company completed the acquisition of LaSalle, a distributor and manufacturer of plumbing, flooring, tile, lighting, air handling and building products for the MH, RV, and industrial markets, for a net purchase price of $51.1 million, net of cash acquired. LaSalle is headquartered in Elkhart, Indiana and operates a total of 15 manufacturing and distribution centers located in North America.
The results of operations for LaSalle are included in the Company’s condensed consolidated financial statements and the Manufacturing and Distribution operating segments from the date of acquisition. The preliminary purchase price allocation is subject to final review and approval, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its fair value estimates.
After adjusting for a $1.1 million increase in the estimated purchase price reported at December 31, 2018 due to a final working capital adjustment of $1.1 million, changes from previously reported estimated amounts as of December 31, 2018 are related primarily to a $6.7 million decrease to inventory, offset partly by a $0.8 million increase to accounts receivable, a $0.3 million increase to prepaid expenses and a $6.7 million increase to goodwill. There was no material impact to the condensed consolidated statement of income related to these changes.
The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of the acquisition for the 2019 and 2018 acquisitions:

15



(thousands)
Trade receivables
Inventories
Property, plant and equipment
Prepaid expenses & other
Intangible assets
Goodwill
Less: Total liabilities
Less: Deferred tax liability, net
Total net assets acquired
 
 
 
 
 
 
 
 
 
 
2019 (1)
$
2,245

$
5,296

$
1,650

$
133

$
8,329