Hot stock to watch: Patrick Industries, Inc. (NASDAQ: PATK)

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Patrick Industries, Inc. (NASDAQ: PATK) stock rose 10.09% on September 30th, 2019 (Source: Google finance) after the company completed the acquisition of G.G. Schmitt & Sons, Inc., which is a designer and manufacturer of customized hardware and structural components, that includes marine towers, seats, ladders, handrails, port lights, and other metal hardware and related products, mainly for major OEMs in the marine industry. G.G. Schmitt’s trailing 12-months revenue through August 2019 was about $20 million and the Company projects the acquisition to be immediately accretive to net income per share. The acquisition of G.G. Schmitt includes the acquisition of accounts receivable, inventory, and machinery and equipment. The acquisition was funded under the Company’s credit facility. Patrick will continue to operate G.G. Schmitt on a stand-alone basis under its brand name in its existing facilities.

On the other hand, the company has reported 1% rise in net sales for the second quarter of 2019 to $613.2 million from $604.9 million in the same quarter of 2018. The growth in the second quarter was mainly due to the acquisitions and market share gains, which was partially offset by quarter-over-quarter shipment declines in the primary markets. The Company’s revenues from the RV industry, which had formed 56% of second quarter 2019 sales, declined by 13% from the second quarter of 2018, compared to a 14% decline in RV industry wholesale unit shipments. Revenues from the marine industry, which formed 14% of second quarter 2019 sales, rose 39% over the second quarter of 2018, while projected marine powerboat retail unit shipments declined by about 6%. Revenues from the MH industry, that had formed 18% of second quarter 2019 sales, grew 56% compared to the prior year, with a 3% decline in MH industry wholesale unit shipments, compared to the second quarter of 2018. Revenues from the industrial market, which formed about 12% of second quarter 2019 sales and is tied maainly to residential housing, commercial construction, hospitality, and institutional furniture markets, declined 3% compared to the prior year. New housing starts in the second quarter of 2019 had fallen slightly compared to the prior year.

Moreover, the company has reported net income in the second quarter of 2019 of $27.4 million compared to $34.9 million in the second quarter of 2018. For the second quarter of 2019, the company has reported operating income of $45.2 million, which is a decline of 15% from $53.1 million reported in the second quarter of 2018.

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