Patrick Industries, Inc., a component solutions provider for the RV, marine, manufactured housing, and industrial markets, today reported record financial results for the fourth quarter and full-year ended December 31, 2021.
Net sales in the fourth quarter of 2021 increased $375 million, or 49%, to $1.1 billion from $773 million in the fourth quarter of 2020. Strong performance in both our leisure lifestyle and housing markets drove results in the fourth quarter of 2021.
Operating income of $95 million increased $33 million, or 52%, from $62 million in the fourth quarter of 2020. Operating margin of 8.3% in the fourth quarter of 2021 increased 30 basis points compared to 8.0% in the same period a year ago.
Net income was $61 million, an increase of 61%, compared to $38 million in the fourth quarter of 2020. Diluted earnings per share was $2.62, an increase of 60% for the fourth quarter of 2021 compared to $1.64 for the fourth quarter of 2020. Diluted earnings per share for the fourth quarter of 2021 reflects the benefit of state and other income tax items of $0.07 per share.
“We are pleased with our overall performance during the fourth quarter and full year and extremely grateful for the efforts of our entire team, particularly given the supply chain challenges and labor constraints impacting businesses throughout the country,” said Andy Nemeth, Chief Executive Officer.
“In partnership with our customers, our team members worked tirelessly to leverage our flexible operating model against the backdrop of strong demand and production levels in our leisure lifestyle and housing markets. The investments we have been making over the past eighteen months, both strategically and in operating infrastructure, are resulting in positive contributions and will continue to enhance our ability to meet and exceed our customers’ needs.”
Jeff Rodino, President, said, “Market conditions across our platform have remained strong, with positive inventory recalibration starting to occur in the RV industry and strong backlogs in our marine, MH, and industrial markets. Demographic trends point toward long-term growth with new buyers continuing to enter our markets. Our growth has been supported by ongoing implementation of best practice solutions, continuous improvement initiatives, and investments in automation and capacity expansion which continue to drive our results.”
Full Year 2021 Results
Net sales of $4.1 billion for the full year 2021 increased $1.6 billion, or 64%, from $2.5 billion in 2020, primarily reflecting a significant increase in demand in our leisure lifestyle and housing markets as well as contributions from acquisitions completed during 2021. As previously disclosed, net sales for 2020 reflect the impact of COVID-19 related production shutdowns during the second quarter of 2020.
Full-year 2021 operating income of $352 million increased $179 million, or 103%, compared to $173 million in 2020. Operating margin of 8.6% improved 160 basis points from 7.0% in the prior year. Net income of $225 million increased 132% compared to $97 million in 2020. Diluted earnings per share of $9.63 increased 129% compared to $4.20 in the prior year.
Balance Sheet, Cash Flow, and Capital Allocation
Operating cash flow for the fourth quarter of 2021 was $105 million, an increase of 121%, compared to $47 million for the fourth quarter of 2020. Full-year 2021 operating cash flow of $252 million increased 57% compared to the prior year due to strong profitability and growth across all end markets. Business acquisitions for the fourth quarter of 2021 totaled $210 million, including the previously announced acquisitions of Wet Sounds, Inc., a designer, fabricator, engineer, and distributor of innovative audio systems and accessories to marine OEMs and consumers, and Williamsburg Furniture and Williamsburg Marine, manufacturers of seating for the motorized RV and marine end markets. For the full year 2021, business acquisitions in RV, marine, and industrial markets totaled $520 million. Capital expenditures for the fourth quarter of 2021 totaled $21 million, an increase of 108%, compared to $10 million in the fourth quarter of 2020. Capital expenditures for full-year 2021 totaled $65 million, an increase of 102% from 2020, reflecting continued investments in automation and capacity in support of scalable growth.
In alignment with our capital allocation strategy, we returned $25 million to shareholders in the fourth quarter of 2021, consisting of $17 million in opportunistic repurchases of 223,396 shares and $8 million of dividends. For the full year 2021, we repurchased 612,325 shares for a total of $49 million and returned $27 million in dividends to our shareholders.
Our net debt at the end of the quarter was approximately $1.4 billion, resulting in a net leverage ratio of 2.3x (as calculated in accordance with our credit agreement). Available liquidity, comprised of borrowing availability under our credit facility and cash on hand, was approximately $532 million.
Business Outlook and Summary
“The strength and tailwinds in our markets coupled with the focus and dedication of our team and great partnerships with our customers resulted in record results in 2021,” said Mr. Nemeth. “Additionally, through continued strategic diversification and the patient and disciplined execution of our capital allocation strategy, we are continuing to position our platform to drive results and scalability into 2022 and many years beyond. Our marine business almost doubled year over year through both strategic and organic growth, and represented 16% of our 2021 consolidated revenue, up from 14% in 2020. Our continued focus on growing our marine presence, in combination with both the strength of the solid foundation in our RV businesses and long runway we see in our housing and industrial markets, will continue to help propel our business model going forward, complemented by our focus on efficiency and production of highly engineered products and proprietary solutions. We improved our overall margin profile in 2021 and we believe we will have the opportunity to drive further margin improvement in 2022. We expect OEM production in our end markets to remain strong in 2022, and we also expect to continue to use our strong cash flows to invest in automation, strategic information technology solutions, human capital, innovation, and philanthropic efforts to support our customers, team members, and communities as well as our growth and diversification strategy.”
Conference Call Webcast
As previously announced, Patrick Industries will host an online webcast of its fourth-quarter 2021 earnings conference call that can be accessed on the Company’s website, www.patrickind.com, under “For Investors,” on Thursday, February 10, 2022 at 10:00 a.m. Eastern time. In addition, a supplemental earnings presentation can be accessed on the Company’s website, www.patrickind.com under “For Investors.”
About Patrick Industries, Inc.
Patrick Industries is a leading component solutions provider for the RV, marine, manufactured housing and various industrial markets – including single and multi-family housing, hospitality, institutional and commercial markets. Founded in 1959, Patrick is based in Elkhart, Indiana, with over 11,000 employees across the United States.