patrick industries, inc. (patk)

by:KKR Stone     2020-06-22
Washington, D. C. Securities and Exchange CommissionC. 20549FORM 10-Q(X )
Quarterly reports submitted under section 13, 15 (d)
1934 Securities Trading Act for the quarterly period ended March 30, 2014 or ()
Transition reports submitted under sections 13 or 15 (d)
From. . . To. . . File number of the Securities and Exchange Law Commission of 1934 during the transitional period 000-
03922 Pa trick Industrial(
The exact name of the registrant specified in the articles of association)INDIANA35-1057796(
Of a state or another jurisdiction (I. R. S.
Company or organization)
Identification Number)(574)294-7511(
Registrant phone number, including area code)(
Former name, former address and previous fiscal year, if changed since the last report)
Indicate by check mark whether the registrant (1)
All reports requested by Article 13 or 15 have been submitted (d)
Securities Trading Act of 1934 within the first 12 months (
Or a short period of time required for the registrant to submit such reports), and (2)
This filing requirement has been bound for the last 90 days. Yes [X]No []
Check mark whether the instructions are submitted together with the Enterprise website published electronically, if any, each interactive data file is required to be submitted and is subject to article 405th S-
12 months before T (
Or in such a short time that the registrant is required to submit and publish these documents). Yes [X]No []
Indicate by check mark whether the registrant is a large accelerated file manager, a non-accelerated file manager
A smaller reporting company.
See the definition of \"large accelerated file manager\", \"accelerated file manager\" and \"small Reporting Company\" in rule 12b
2 of the Trading Act.
Big speed filer]]
Accelerating film [X]Non-
Accelerating film []
Small report Company []
Indicate whether the registrant is a shell company by check mark (
Defined in Rule 12b-
2 parts of the transaction law). Yes[]No [X]
As of April 25, 2014, 10,650,714 ordinary shares of the registrant had been issued.
Patrick Industrial
Table for contentspart I.
Page financial informationITEM 1.
Financial Statements Consolidated Statements of Financial status (Unaudited)
Three Consolidated statements in March 30, 2014 and December 31, 2013 (Unaudited)
First Quarter Ended March 30, 2014 and March 31, 2013Unaudited)
Notes to Consolidated Financial Statements for the three months ended March 30, 2014 and March 31, 2013 (Unaudited)6-14ITEM 2.
Management Discussion and Analysis of Financial Position and operational results27ITEM 3.
Quantitative and qualitative disclosure of market risks
Part II controls and procedures.
Other information items 1A.
Risk factor 28 Item 2.
Unregistered sales of stock securities and the use of procedures
Part 1: financial information.
Financial statementspatrick industries, INC.
Consolidated Financial Statements (Unaudited)(thousands)As ofMar. 30, 2014Dec.
31. 2013 asset bad debts and cash equivalents Receivables, net inventory Deferred tax asset repayment Expenses and Other Total assets of the current period property, plant and equipment, accumulated depreciation of property, plant and equipment at no cost2014: $6,427; 2013: $5,640)
Deferred financing costs of net accumulated amortization (2014: $1,492; 2013: $1,405)Other non-
Current Assets stock and shareholders\' equity Current liabilities account current liabilities
Deferred compensation for fixed-term debt and other Deferred tax liabilities additional to common shares of shareholders\' equity-paid-in-
The total amount of surplus SHAREHOLDERS\' EQUITY Liabilities and shareholders\' equity for capital accumulation of other comprehensive benefits are shown in the notes to the consolidated financial statements.
Patrick Industrial
Consolidated income statement (Unaudited)
20142013 Net Sales Cost of goods soldGROSS Operating expenses: warehouse and delivery sales of intangible asset gains when selling fixed asset operating expenses, general and management Amortization of interest charges on operating income, income before tax net income tax basis net income per share common stock diluted net income per share common stock Weighted Average issued shares
Basic weighted average issued shares
Streamline notes to consolidated financial statements.
Patrick Industrial
Consolidated Statement of Cash Flow (Unaudited)(thousands)
3 months March 31, 2013-30, net cash flow income from 2014 operating activities adjusted to reconcile net income with net cash provided by operating activities: Depreciation and amortization of intangible assets
Deferred income tax income at the time of sale of fixed assets cash return value of life insurance reduce Deferred financing costs amortization Changes in operating assets and liabilities: net cash provided by Accrued liabilities operating activities for Trade receivables inventory Prepaid and other accounts payable and deferred compensation obligations from investment activities Capital expenditures from proceeds from the sale of property and equipment for other cash for investment activities net from financing activities
Borrowing on regular debt (payments)
Net payment of deferred financing costs under the repurchase plan stock repurchase to achieve stock excess tax incentives
Compensation income based on exercise of stock options, including tax preferential payment of capital lease obligationsused in)
Increase in financing activities (decrease)
At the beginning of the period Cash and cash equivalents at the end of the period Cash and cash equivalents are shown in the notes to the consolidated financial statements.
Patrick Industrial
Notes to the consolidated financial statements (Unaudited)1.
The basis of the statement in Patrick Industries, Inc. \'S opinion(
\"Patrick\" or \"Company \")
The unaudited consolidated financial statements attached contain all adjustments (
Including normal repeated adjustments)
It must be fair to state the company\'s financial position as of March 30, 2014 and December 31, 2013, as well as the results of income and cash flow for the three months ended March 30, 2014 and March 31, 2013.
Patrick\'s unaudited streamlined consolidated financial statements were prepared in accordance with the rules and regulations of the Securities and Exchange Commission and the generally accepted accounting principles of the United States of America (“U. S. GAAP”).
Streamlining consolidated financial statements as required by the United StatesS.
GAAP requires management to make estimates and assumptions that affect the consolidated financial statements and the amounts reported in the accompanying notes.
Certain information and footnote disclosures are usually included in the annual financial statements prepared in accordance with US accounting standardsS.
GAAP has been compressed or omitted under these rules or regulations.
For instructions on important accounting policies used by the company in preparing consolidated financial statements, please refer to Form 10-note 2 to consolidated financial statements in the company\'s annual report-
The year ending December 31, 2013.
The December 31, 2013 consolidated statement of financial status data is derived from audited financial statements, but does not include all disclosures requested by the US government. S. GAAP.
Operating results for the first quarter ended March 30, 2014 do not necessarily indicate the annual expected results as of December 31, 2014.
In preparing the consolidated financial statements of Patrick for the quarter ended March 30, 2014, management assessed all major follow-up events or transactions that occurred after the balance sheet date to the release date of form 10
Q. Potential confirmation or disclosure in consolidated financial statements.
For events that occur after the balance sheet date, see note 13. 2.
Inventory is represented at a lower cost (First-In, First-Out (FIFO)Method)
Or market, consisting of the following categories: raw materials in processed finished products: Reserve total manufactured goods in stock abandonment, network materials purchased for resale (
Distribution Products)
Minus: total number of discarded materials used in stock reserves for resale (
Distribution Products)
, NetTotal ventories3.
Goodwill and Intangible assets Goodwill and other intangible assets are allocated to the reporting unit of the company on the date of the initial record.
Goodwill and indefinite
The intangible assets that live are not amortized, but in the year (
Or more frequently in some cases)
Impairment test based on its estimated fair value.
Goodwill impairment tests were conducted at the reporting unit level and at a lower level than the business unit.
The manufacturing department of the company includes the acquisition of goodwill generated by concave inks (
Acquisition in decoration Holdings Limitedacquisition)
Sales of high-quality solid wood (
\"Good quality hard wood \"), A. I. A.
LLC KKR countertop (“AIA”)
, Infinite graphics, decorative Mfg. , LLC (“Décor”)
Creative Wood Design Co. , Ltd. (\"Creative Wood \")
Millbury hard Wood Products Co. , Ltd. (
\"Midbury Woods \")Front line manufacturing plant. , Inc. (“Frontline”)
, And the concept of the Premier, the company(“Premier”).
While indented ink, AIA, unlimited graphics, decor, creative Wood, medalbury solid wood, front line and Premier League are still reporting units for companies that assess impairment as part of the company\'s hard wooden door reporting Department, quality hard wooden doors are assessed as impairment.
The company\'s distribution arm includes the acquisition of Blazon International Group (“Blazon”)and John H. McDonald Co. , Inc.
Furniture on the west side of D/B/(“West Side”)
It is still the reporting unit for the assessment of impairment. Finite-
Live Intangible assets that meet certain criteria continue to be amortized over their useful life and, in the presence of impairment indicators, conduct impairment tests based on estimated undiscounted cash flows.
If an event or situation change indicates that the book value may exceed the fair value, the company will conduct the required goodwill impairment test in the fourth quarter or more frequently.
No impairment was recognized for the first quarter ended March 30, 2014.
In the first quarter of 2014, there was no significant change in the methodology for assessing Goodwill impairment.
The company does not believe that, in the foreseeable future, there may be significant changes in the estimates or assumptions used to determine impairment.
On March 30, 2014 and December 31, 2013, the book amount of goodwill in the manufacturing and distribution sectors was $13.
$7 million and $2.
8 million respectively.
As at March 30, 2014, the balance of the remaining intangible assets was $24.
$8 million consists of $4.
1 million of the life of the trademark is uncertain and therefore no amortization fee is recorded, $20.
7 million relationship with customers and non-
Competition agreements, which will be amortized within 3 to 19 years.
Net Other intangible assets as of March 30, 2014 and December 31, 2013 include the following: customer relations
For the three months ended March 30, 2014, the net change in the book value of other intangible assets is as follows :(thousands)
Amortization balance December 31, 2013-March 30, 2014
In September 2013, the company acquired business and certain assets in Warsaw, Indiana --
Headquartered in Frontline, it is a manufacturer of fiberglass wash basin fixtures, including bathtubs, showers and combined bathtubs/showers for RV, MH and residential markets, with a net purchase price of $5.
2 million, which includes payments or payments made based on future performance.
This acquisition provides the company with the opportunity to establish a business in the fiberglass wash basin and shower surround and fixture market and increases product supply, market share and unit content.
From the date of acquisition, the results of operations at the front line are included in the company\'s streamlined consolidated financial statements and manufacturing operations.
Or the fair value of the cost arrangement is estimated by applying the revenue method, including assumptions related to future payment probabilities and discounted cash flow.
The portion of the purchase price exceeding the fair value of the acquired net assets is recorded as goodwill, representing the use of the company\'s existing procurement, manufacturing, sales, organizational talent with front-line teams and system resources with expertise, to maximize efficiency, revenue impact, market share growth, net income.
Acquisition funds from loans under the company\'s 2012 credit line (
Defined below).
Assets acquired in the acquisition and liabilities assumed are recorded in the Company\'s Consolidated financial status statement at the estimated fair value on the date of acquisition.
The preliminary purchase price allocation is subject to final approval, so all necessary procurement accounting adjustments are expected to be completed in the first half of 2014.
The following summarizes the estimated fair value of acquired assets and liabilities as of the date of acquisition :(thousands)
In September 2013, the company acquired operations and certain assets in Warsaw and Indiana --
Headquartered in Premier, it is a custom manufacturer of solid surfaces, granite and quartz countertops for RV, MH and residential markets with a net purchase price of $2.
6 million, which includes payments or payments made based on future performance.
The acquisition provides an opportunity for the company to expand its presence in the KKR countertop market and increase its product, market share and unit content.
From the date of acquisition, the results of Premier\'s operations are included in the company\'s streamlined consolidated financial statements and manufacturing operations.
Or the fair value of the cost arrangement is estimated by applying the revenue method, including assumptions related to future payment probabilities and discounted cash flow.
The portion of the purchase price exceeding the fair value of the acquired net assets is recorded as goodwill, representing the use of the company\'s existing procurement, manufacturing, sales, and system resources, with the organizational talent and expertise of the Excellence team, to maximize efficiency, revenue impact, market share growth, net income.
The acquisition was obtained through a loan under the company\'s 2012 credit line.
Assets acquired in the acquisition and liabilities assumed are recorded in the Company\'s Consolidated financial status statement at the estimated fair value on the date of acquisition.
The preliminary purchase price allocation is subject to final approval, so all necessary procurement accounting adjustments are expected to be completed in the first half of 2014.
The following summarizes the estimated fair value of acquired assets and liabilities as of the date of acquisition :(thousands)
Foreign trade firm ablesinventorieproperty, plant and equipmentAccounts payment accrual liabiliitiesintelible assetsGoodwillTotal online shopping priceWest SideIn September 2013, the company acquired business and certain assets of Goldman Sachs, Indiana
Wholesale supplier West End based in Los AngelesZ-
Boy®Recliner and Serta®Trump\'s home™Among other furniture products, the mattress range is available for the RV market at a net purchase price of $8. 7 million.
The acquisition provides the company with an opportunity to expand its business in the wholesale furniture business of the RV industry and increase its product supply, market share and unit content.
The results of operations on the west side are included in the company\'s streamlined consolidated financial statements, as well as in the distribution operations section from the date of acquisition.
The portion of the purchase price exceeding the fair value of the acquired net assets is recorded as goodwill, and the representative uses the company\'s existing procurement, sales, and the organizational talent and expertise of the Western District team to obtain system resources, to maximize efficiency, revenue impact, market share growth, net income.
The acquisition was obtained through a loan under the company\'s 2012 credit line.
Assets acquired in the acquisition and liabilities assumed are recorded in the Company\'s Consolidated financial status statement at the estimated fair value on the date of acquisition.
The following summarizes the fair value of the acquired assets and the liabilities assumed as of the date of acquisition :(thousands)
Transaction collection inventory property, factory and equipment Prepaid expenses Accounts payable and accrued liabilities total net purchase price form information below first quarter form information as of March 31, 2013 assume front line, Prime Minister, as of January 1, 2013, that is, the beginning of such acquisitions, the acquisition of the West Side occurred.
The formal information contains the actual operating results of the front line, the prime minister and the west side, combined with the results before the respective acquisition dates, to reflect the expected impact of the acquisition as of January 1, 2013, that is, the beginning of the year when such acquisitions occurred.
In addition, the formal information includes amortization expenses related to the intangible assets obtained in these three acquisitions, which is about $0.
The first quarter ended March 31, 2013 totaled £ 3 million.
End of the first quarter (
In addition to the data per share, there are thousands
The Basic net income of RevenueNet income in March 31, 2013 per common stock diluted net income form information is for reference only, not necessarily indicating that if the acquisition has been completed by that time, this is not a forecast for future results.
No business was acquired in 2014 and 2013. 5. STOCK-
Company account for shares-
Base compensation based on fair value confirmation terms.
The compensation fee recorded by the company is $0.
$7 million and $0.
The first quarter was 3 million, and the second quarter was 2014 in March 31, 2013-
Prepare salary plans based on consolidated income statements.
Estimated fair value of the company (i)
As of the date of grant, all shares are granted to use the closing price per share of the Company\'s common stock on that date, and (ii)
As of the date of grant, all stock options and stock value-added rewards are applied Black-
Option pricing model.
Board of Directors (the “Board”)
The following shares were granted in 2013: 89,947 shares in March 4, 2013;
5,000 shares in March 11, 2013;
And 19,480 shares in May 23, 2013.
In addition, the board of directors approved the issuance of 200,000 shares in the exercise of the stock option granted on December 18, 2013, as well as 200,000 shares that may be issued in the exercise of the stock appreciation granted on December 18, 2013.
The grant of stock value-added rights shall be approved by shareholders as an amendment to the company\'s 2009 Comprehensive incentive plan (the “Plan”)
Increase the number of shares available for grant under the plan and make certain other changes, and the company has taken stock value-added rights into account, just as these changes have been approved.
The following shares were approved in 2014: 34,000 shares were approved in February 12, 2014 and 65,668 shares were approved in February 18, 2014.
In addition, on February 18, 2014, the board of directors approved the issuance of 44,001 restricted stock units under the scheme.
As of March 30, 2014, there were approximately $7.
1 million of total unconfirmed compensation costs related to inventory
According to the salary arrangement granted by the incentive plan.
This cost is expected to be confirmed by weighting
Average cycle 25. 6 months. 6.
Basic net income per share of common stock is by dividing the net income by weighting-
The average number of ordinary shares issued.
Diluted net income per share of common stock by dividing net income by weighting-
The average number of issued common shares, plus the dilution effect of stock options, stock appreciation rights and restricted stock units (
Collectively referred to as \"common stock equivalents \").
The dilution effect of common stock equivalents is calculated using the average market price for the period under the treasury stock method.
Certain common stock equivalents are not included in the calculation of diluted net income per share as the strike price for these common stock equivalents is higher than the average market price for common stock.
Earnings per common stock per share are calculated in the following manner: Basic per share and diluted per share net income calculation weighted average issued common stock
Underlying Effects of weighted average issued common stock of potentially diluted Securities
Basic net income of ordinary shares shall be net income of ordinary shares. OTHER NON-
Existing assets in March 30, 2014 and December 31, 2013, other non-
Current assets of $1.
Million is a net loan based on the cash value of certain company executives and directors under the life insurance policy, which is about $2.
$8 million and $2.
7 million respectively. 8. DEBTTotal long-
The long-term outstanding debt as at March 30, 2014 and December 31, 2013 was $47.
$4 million and $55.
0 million respectively.
2012 credit promotion on October 24, 2012, the company signed a credit agreement (
\"2012 Credit Agreement \")
Acting as an agent and lender with Wells Fargo Bank and National Association (“Wells Fargo”), and Fifth-
Third as a participant (
\"Lender \")
Build a fiveyear $80.
Advanced credit guaranteed by 0 million cycles (
\"Credit Line 2012 \").
2012 The guarantee method of the credit agreement is based on the guarantee agreement between the company and Wells Fargo as an agent in October 24, 2012 to pledge most of the company\'s assets.
2012 The Credit Agreement includes certain definitions, terms and reporting requirements, including the following: ● 2012 the maturity date of the credit loan is October 24, 2017;
● Loans under the revolving credit line (the “Revolver”)
The maximum borrowing limit is $80. 0 million;
● The company has the option of adding $20 to the 2012 credit line.
Million upon the request of the lender and upon its approval;
● The interest rate of the loan under the Revolver is the benchmark interest rate plus the applicable margin or the London interbank rate (“LIBOR”)
In addition to the applicable security deposit, the Company shall pay part of the cost of the revolver that is not used but has been promised;
Revolver including submarinelimit up to $5.
0 million advance on the same day (“Swing Line”)
If interest is calculated according to the benchmark interest rate plus the applicable margin; ●Up to $20.
A revolver of 0 million will be provided as a sub-facility for the issuance of a standby letter of credit, subject to certain expiry dates;
● Financial covenants include requirements for comprehensive aggregate leverage ratio and consolidated interest coverage, and other covenants include restrictions on permitted acquisitions, capital expenditures, liabilities, restricted payments and fundamental changes (
Please see more details below);
And ● According to the pre-defined conditions, the customary prepayment clause for unpaid payments under the revolver is required.
The company had $47 as of March 30, 2014 and December 31, 2013.
$4 million and $55.
0 million, outstanding under his revolver.
On March 30, 2014, the loan interest rate under the revolver was the main interest rate plus 0. 50% (or 3. 75%)
, Or LIBOR plus 1. 50% (
From 1. 625% to 1. 6875%).
On December 31, 2013, the loan interest rate under the revolver was the main interest rate plus 0. 50% (or 3. 75%)
, Or LIBOR plus 1. 50% (or 1. 6875%).
The portion promised but not used by the revolver shall be paid at 0.
The two periods were 20% pounds.
According to the 2012 credit agreement, the financial contract includes (a)
Maximum aggregate leverage ratio in quarterly units-
End the foundation, no more than 3. 50:1.
12-month period as of the quarter-end; (b)
Minimum comprehensive interest coverage under revolvers, in quarterly terms
The ultimate foundation of at least 2. 25:1.
12-month period as of the quarter-end; and (c)
The annual capital expenditure limit is $12.
$2013 for millions of months.
The following fiscal year was 0 million.
If the total leverage ratio of the merger exceeds 3. 00:1.
00 and below 3. 50:1.
00, if the company maintains an asset coverage of at least 1, the company is deemed to be in compliance with this financial deed. 00 to 1.
As of 00 at the end of each period.
The combined total leverage ratio is the ratio of any period (i)
Total comprehensive liabilities (ii)
Earnings before interest, tax, depreciation and amortization (“EBITDA”).
Total consolidated liabilities for any period are (i)
Total outstanding debt of the revolver ,(ii)
Outstanding Capital leases and credit certificates, and (iii)
Obligation to postpone payment.
Asset coverage for any period is (i)
The eligible amount of the company\'s trade payables, inventories and fixed assets, minus certain reserves as defined in the 2012 credit agreement (ii)
2012 total outstanding debts under the credit line.
The comprehensive interest coverage rate for any period is (i)
EBITDA minus depreciation (ii)
Combined Interest charges plus the sum of restricted payments paid by the company.
As of the third quarter,
During the month ended March 30, 2014, the company complied with all three financial covenants on each reporting day.
Maximum total leverage ratio required, minimum interest coverage and annual capital expenditure limit amount compared to the actual amount for the fiscal three years-
The month ended March 30, 2014 is as follows: comprehensive leverage ratio (12-month period)
Comprehensive Interest Coverage (12-month period)
Annual capital expenditure limit (actual year-to-date)9.
Fair Value Measurement due to the relatively short maturity date of these financial instruments, the book amount of cash and cash equivalents, Trade receivables and accounts payable is close to fair value as of March 30, 2014 and December 31, 2013.
Long carrying capacity-
Regular debts are subject to the terms and conditions available to the company on these dates, compared to the terms and conditions of outstanding long-term debts, fair value as of March 30, 2014 and December 31, 2013term debt. 10.
The accumulation of other consolidated income, excluding taxes, is related to the cumulative change in the funding status of pension benefits, which was $54,000 in March 30, 2014 and December 31, 2013. 11.
The estimated annual effective tax rate recorded by the income tax company is 38.
The first quarter of 2014 was 5% per cent, compared with 39% per cent in 2013.
The company has various net operating losses carried forward (“NOLs”)
About $4.
As at December 31, 2013, $5 million, of which approximately $3.
As at March 30, 2014, 7 million people remained to be used.
The company estimates that by the end of 2014 it will take advantage of most of the remaining state NOLs.
In the first quarter of 2014, the company achieved a net tax discount of about $1.
0 million related to excess stock returns
As at December 31, 2013, no basic compensation for deferred tax assets was recorded.
This tax benefit was included in shareholders\' equity when it was realized in 2014. 12.
The division Information Company has determined that the segment it can report is based on its internal reporting method, which divides its business by product category and production/distribution process.
The description of the report section of the company is as follows: Manufacturing-the most important manufacturing department of the company is lamination, which makes use of various materials such as lauan, medium-
Density cardboard (“MDF”)
Plaster and scrap plates bonded to many products with adhesive or heating process, including vinyl, paper, foil and high
Pressure laminated products.
These products are used to produce furniture, shelves, walls, counters and cabinet products with various finishes and textures.
This section also includes the cabinet door department, the fiberglass bathroom fixtures department, the hardwood furniture department, the vinyl printing department, the solid surface, the granite and quartz manufacturing department, and the external graphics department.
Patrick\'s main manufacturing products also include packaged vinyl, molded paper and hardwood floors, interior channel doors, and slotwall panels and components.
In the three months ended March 30, 2014 and March 31, 2013, the manufacturing sector contributed approximately 76% and 78% of the company\'s net sales, respectively.
Distribution-company pre-distribution
Finished wall and ceiling panels, drywall and drywall finish products, electronics, electrical wiring, electrical and plumbing products, cement siding, interior access doors, roofing products, laminate and ceramic flooring, shower doors, furniture for purchase products, fireplace and surroundings, interior and exterior lighting products, and other miscellaneous products.
During the three months ended March 30, 2014 and March 31, 2013, the distribution division contributed approximately 24% and 22% of the company\'s net sales, respectively.
The table below provides unaudited information on sales and operating income in these segments.
First quarter as of March 30, 2014:thousands)
For the first quarter ended March 31, 2013, the total amount of manufacturer distribution outside sales revenue between sales departments :(thousands)
Total manufacturing distribution net external sales inter-departmental sales revenue the following table lists the reconciliation of departmental operating income with Consolidated operating income: departmental operating income that can be reported when selling fixed assets
The stock repurchase program in February 22, 2013, the board authorized the purchase of up to $10 stock repurchase program.
In the next 12 months, the Company\'s common stock is 0 million.
On February 13, 2014, the board authorized the increase of the amount that the company\'s shares may receive through the existing stock repurchase program to $20 in the next 12 months.
Million, including about $3.
According to the previous authorization, 9 million is available.
Stock buybacks were not made in the first quarter as of March 30, 2014.
In the second quarter from 2014 to April 30, 2014, the company bought back 23,011 shares at an average of $39.
$90 per share, the total cost is about $0. 9 million.
Since the launch of the stock repurchase program from February 2013 to April 30, 2014, the company has repurchased a total of 430,341 shares at an average price of $16.
$26 per share, the total cost is about $7. 0 million.
Ordinary shares of common stock companies do not have a prescribed par value.
Therefore, the use of the average cost method reflects the repurchase of common stock, as a reduction in common stock, additional paymentin-
Capital, and retained earnings on the consolidated statement of the company\'s financial position. ITEM 2.
Management to the financial situation and the operation result discussion and the analysis management to the financial situation and the operation result discussion and analysis? “MD&A”)
It should be read in conjunction with the Consolidated consolidated financial statements of companies and their notes contained in Item 1 of this report.
In addition, this MD & A contains certain statements relating to future results that are forward
The term was defined in the Private Securities Litigation Reform Act of 1995.
See \"information about forwarding --
\"Finding statements\" on page 27 of this report \".
The company has no obligation to update these forwarding-
Look at the report.
MD & A is divided into seven main parts: Overview of comprehensive operating performance of markets and related industries the first quarter ended March 30, 2014 compared to the 2013 Business Unit review as of March 30, 2014, first quarter ended 2013 with Unallocated corporate expense liquidity and capital resource liquidity information on forward accounting policies and seasonal impact
In the first quarter of 2014, the overall view of the performance of the market and related industries reflects the continued strong growth of leisure vehicles (“RV”)
Despite the poor winter weather conditions in the Midwest causing delays in production and transportation throughout the industry, the market remains.
However, these weather
Related issues do not have a significant impact on our overall revenue results, which is reflected in the continuous seasonal sales growth per month in line with the company\'s expectations.
Housing manufactured (“MH”)
While affected by the winter weather conditions of this quarter, the industry has also experienced a year-over-
Annual shipment improvement.
In addition, although the number of new housing starts dropped slightly in 2014, our sales to the industrial market sector, which is mainly related to the residential market, rose sharply in first quarter of 2013.
We expect the second and third quarters of 2014 to be more seasonal compared to 2014.
Overall, we continue to capture market share through strategic acquisitions, product line expansion and new product initiatives.
While general uncertainty remains relevant to the sustainability of the strength of the economic recovery, we expect that the three major markets we serve will grow steadily for the rest of 2014.
In addition, we have also seen some flexibility, especially in the RV market, and according to current indicators, we believe that there is a potential to rise in the near future, including seasonal retail sales and wholesale shipment trends, consistent with previous years, the active flow of the retail lot of the dealer, compared with the original equipment manufacturer, the balance related to the dealer\'s inventory level (“OEM”)
Production level.
The RV industry is our main market, accounting for 76% of the company\'s 2014 sales in the first quarter, as evidenced by an increase in production levels and wholesale unit shipments compared to the previous year.
According to The Caravan Industry Association (“RVIA”)
In the first quarter of 2014, the shipment level reached 89,971 units, an increase of about 13% over the previous year and ledover-
Shipments have increased in 17 of the last 18 quarters.
We believe industry will continue to grow in 2014.
RVs retail sales and related production levels will depend on the overall view of the economy, the level of consumer confidence and the state of the credit market.
The bad winter weather experienced in the Midwest and some of our regions did result in delays in production and transportation in 2014, not only for the company, but also for certain RV OEMs.
As a result, these OEMs moved some production activities to the weekend in the first quarter to meet the dealer\'s level of demand.
Some OEMs are currently facing a shortage of RV transport drivers delivering products to retail dealers.
We are currently monitoring this to determine the impact (if any) of 2014 on the overall wholesale unit shipment level ).
In addition, further increases in fuel prices have the potential to have a negative impact on the sales of RV retail units in the short term
However, we believe that the RV market has an integral part of a \"lifestyle\" that will continue to drive a stable base shipment level.
The correlation between the above indicators, as well as favorable demographic trends, has led us to believe that the positive time of the RV industry is longer --
As the overall economic situation and consumer confidence improve, the economic outlook will continue to improve.
We expect this market to continue to grow steadily and further believe that RV dealers have the ability to carry additional inventory to support this growth, this will maintain the overall balance of the industry from OEM wholesale shipments to dealer inventory levels to retail sales.
We continue to believe that based on factors such as the growth of shipments in the past four years, positive industry population trends, and expected growth in demand levels, the future of the RV industry is promising and enhances the strength of the overall economic environment.
MH industry accounted for about 13% of the company\'s 2014 sales in the first quarter.
According to industry insiders, wholesale unit shipments increased by about 6% compared with 2013.
While we believe the industry was more affected by severe winter weather conditions in 2014, we expect to see stronger seasonal patterns in the second and third quarters of 2014.
While we do not expect significant growth in the MH market, we believe that demand has reached the bottom of the cycle and the opportunity to grow in moderate yearsover-
Annual growth, limited downside risks in the near future
Term, based on the number of historical relationships maintained with the start of the new house, and assuming availability of credit and re-calibration of quality credit standards.
In addition, artificial housing provides a cost-effective alternative for individuals and families seeking to establish or rebuild housing
Building ownership of the House or its credit rating has been affected by the economic and employment environment in the past few years.
We also believe that artificial housing is an attractive option for those who migrate to temporary housing alternatives.
Factors that may have a further favorable impact on the production level of the industry include quality credit standards in the residential market, employment growth, favorable changes in financing laws, new tax credits and other government incentives for new home buyers, raising interest rates on traditional residential loans and improving asset conditions
Housing loans in manufacturing support the securities market.
Factors related to factors that have had a negative impact on the MH industry demand in recent years remain outstanding, including the lack of alternative financing and credit supply, slow job growth, and, in some areas, excess residential inventories.
However, we believe that the industry has a longer-term potential as residential demand recovers.
In the past 40 years, the average is about 3-
The total number of residential starts is 4 months single
Family housing begins.
In addition, the wholesale unit shipment level in the MH industry averaged about 10% of the single shipment level
Family housing has started in the past 10 years.
The industrial market accounted for 11% of our 2014 sales in the first quarter, mainly composed of the kitchen cabinet industry, retail and commercial fixed equipment market, office and home furniture market and regional distributors.
The company has undergone a slight shift in the structure of sales in the industrial market, from about 60% directly linked to the residential market in recent quarters to about 57% in 2014.
This decline reflects a slight increase in our sales to the business side, mainly in the office furniture market and the continued expansion of the table top market. While the U. S.
S. Department of Commerce reported that new housing starts fell 2% in the first quarter of 2014, while going. , due to acquisitions and organic growth, our industrial sales increased by about 24% compared to the first quarter.
National Association of house builders (“NAHB”)(
As of May 2, 2014)
Compared with 2014, the number of new housing starts is expected to increase by about 17% in 2013.
Our sales to this market are usually six to nine months behind the start of new homes.
To offset some of the effects of the weak housing market in recent years, we focus on diversified efforts, strategic acquisitions, and bringing new and innovative products to the market.
In addition, we have made certain sales efforts for segments that are not directly related to the construction of new homes, including retail fixtures, offices, furniture and table-top markets.
Therefore, the structure of our products has changed, which has a positive impact on the income of the industrial market.
In addition, we believe that the expected sustained low interest rates and the overall expected economic improvement and the depressed demand in the coming years remain some of the factors affecting the real estate industry.
2014 outlook kin general, the three major markets we serve experienced steady growth in 2014 and we expect to continue to grow for the rest of 2014.
RVIA currently predicts that the RV unit shipment level will increase by about 6% in 2014 compared to the full year of 2013.
In addition, we expect production levels in the MH industry to be further improved in 2014, reflecting improvements in the overall economy and aligned with improvements in the single market
NAHB expects home housing to start throughout 2014.
According to the industry\'s current annual operating rate, the company expects MH wholesale unit shipments to increase by about 8% in 2014 compared with 2013.
It is estimated that new housing starts will increase by about 17% years in 2014 --over-year (
Forecast for NAHB as of May 2, 2014)
Consistent with the improvement of the overall economic situation.
Despite the severe winter weather conditions in the Midwest in 2014 having an impact on unit shipments and production plans, we are optimistic about the future of the three major markets we serve, and continue to believe that downside risks are limited in the near future, and we are good --
With the improvement of the overall economic environment, each of these markets will increase revenue.
Although our visibility is related to a longer period of time
Industry conditions are limited to about six months and we expect the quarter to continueover-
Revenue growth for the remaining fiscal year of 2014, excluding revenue contributions from acquisitions completed in 2013 and any potential acquisitions in 2014.
We will continue to review our business on a regular basis, balancing the appropriate risks and opportunities and maximizing efficiency to support the company\'s long-term development
Long-term strategic growth goals.
Our team remains focused on strategic acquisitions, gaining market share and increasing our unit content, keeping costs aligned with revenue, maximizing operational efficiency, talent management, and organizational strategic agenda
Key areas of focus for 2014 include strategic revenue growth, increase in operating income and net income, earnings per share, pre-interest earnings, taxes, depreciation and amortization (“EBITDA”)
And free cash flow.
Other focus areas include: ● marketing to other commercial/institutional markets to diversify the revenue base;
● Further improve the operational efficiency of all manufacturing operations and company functions;
● Acquisition of Business/product lines that meet established standards;
● Balancing the active management of inventory quantity and pricing with the need to meet the expected growth of customer demand, as well as increasing the demand of selected key commodity suppliers;
Continuous development of existing product lines and increase of new product lines.
Combined with our organizational strategic agenda, we will continue to make targeted capital investments to support new businesses and leverage our operating platform, and we will strive to integrate sales more fully, strengthen and expand customer relationships with high quality services that exceed customer expectations to meet customer needs.
In the first quarter of 2014, capital expenditure was about $0.
$9 million to $1.
The first quarter of 2013 was 3 million.
The current full-year capital plan for 2014 includes spending of about $8.
Including our enterprise resource planning (“ERP”)
Systems, equipment upgrades to ensure that our facilities are capable, capable and technology-driven to our growth plans, as well as other strategic capital and maintenance improvements.
Compared to 2013, the review of consolidated operating results for the first quarter ended March 30, 2014 The table below lists the percentage relationship between certain items in the Company\'s consolidated income statement and net sales.
Net sales Cost of goods soldGross profit warehouse and delivery expenses, amortization of general and administrative expenses of intangible asset gains when selling fixed assets, interest expenses on operating income, net income tax.
Net sales increased by $28 in the first quarter of 2014. 0 million or 197%, to $170.
$1 million, $142.
The first quarter of 2013 was 1 million.
The main reason for the growth was that the company\'s revenue from the RV industry increased by 21%, revenue from the MH industry increased by 12%, and revenue from the industrial market increased by 24%.
Bad winter weather in the Midwest caused production and transportation delays in our Indiana business and some other regional businesses in January and February.
However, these weather
Related issues have no significant impact on our overall revenue results, as evidenced by the continued seasonal sales growth each month in 2014.
Excluding the income contribution of the three acquisitions completed in 2013 (Frontline Mfg. , Inc. (“Frontline”)
Premier concept Ltd. (“Premier”), and John H. McDonald Co. , Inc.
Furniture on the west side of D/B/(“West Side”)
The company estimates organic growth in 2014 to be around $ 13%.
Total revenue grew by 5 million, including market share growth of about 1% and growth related to an improvement of about 12% across the industry.
$10 left.
Revenue increased by 5 million in the first quarter of 2014 due to the incremental contribution of 2013 acquisitions (
Including related market share and industry growth)
This led to an increase of about 7%.
The main reasons for the sales growth in the first quarter of 2014 are :(i)
Increase the penetration rate of RV market; (ii)
Improve retail equipment, residential cabinets and office furniture business in the industrial market; and (iii)
Wholesale unit shipments in MH industry increased.
Our sales to the industrial market sector primarily related to residential and commercial and retail fixed markets generally delay the start-up time for new homes by about six to nine months.
Content of each RV of the company (
Based on trailing 12-month basis)
From $1,364 in 2014 to $1,142 in 2013.
MH content per unit (
Based on trailing 12-month basis)
The first quarter, which rose to $1,599 in 2014, compared 1,580 from $2013.
The RV industry accounted for about 76% of the company\'s first-quarter sales, and wholesale unit shipments in the industry increased by about 13% compared to 2013.
The MH industry accounted for 13% of the company\'s 2014 sales in the first quarter, and wholesale unit shipments increased by 6% compared to the previous year.
In the first quarter of 2014, the industrial market sector accounted for about 11% of the company\'s sales.
We estimate that 57% of our industrial income was directly related to the residential market in 2014.
We expect to continue every quarter. over-
Annual revenue growth for the remainder of the fiscal year 2014, excluding acquisitions completed in 2013 and revenue contributions from any potential acquisitions in 2014.
The cost of selling goods.
The cost of goods sold increased by $23. 3 million or 195%, to $143.
The first quarter of 2014 was $0, down from $119.
2013 7 million.
As a percentage of net sales, the cost of goods sold decreased to 84 in 2014. 0% from 84. 2% in 2013.
In the first quarter of 2014, the percentage of sales costs to net sales was positively affected by the following factors :(i)
Compared with our overall income from fixed indirect expenses ,(ii)
The impact of the acquisition completed in the third quarter of 2013, and (iii)
Continuous Organizational and process changes have improved labor efficiency, reduced scrap and return, and improved material production.
The percentage of sales costs to net sales was negatively affected in the current quarter by the following factors :(i)
Sell lower-margin products at the company\'s two distribution facilities; (ii)
In one of our distribution businesses, increased overtime and contract labor costs to meet customer needs; and (iii)
Compared to 2014, the cost of certain items used in the manufacture of our products fluctuated in 2013.
In addition, higher energy costs and increased demand in certain market sectors may lead to cost fluctuations in certain raw materials and other products that we use and distribute quarterly.
The company continues to explore alternative sources of raw materials and components at home and abroad. Gross Profit.
Gross profit increased by $4. 7 million or 21. 0%, to $27.
The first quarter of 2014 was $1 million.
The first quarter of 2013 was 4 million.
Gross profit increased to 16 as a percentage of net sales.
The first quarter of 2014 was 0%.
2013 the same period 8%.
The net increase in gross profit USD in the first quarter of 2014 reflects the net impact of the above factors under \"sales costs.
Economy or industry-
A wide range of factors that affect the profitability of our RV, MH and industrial enterprises include the cost of goods and the competitive environment used to manufacture our products, which may cause gross profit margin to fluctuate from quarter to quarterto-
Quarterly and Annualto-year.
We expect the gross profit margin for the full year of 2014 to increase from 2013, excluding any fluctuations in commodity pricing, competitive pricing dynamics or other circumstances beyond our control, resulting in operational leverage due to continued expected sales growth, and compared with the historical consolidated gross margin, the acquisition gross margin completed in previous years is higher.
We expect that growth in gross profit margin in 2014 will be partially offset by a small increase in operating expenses, as a percentage of net sales, as described below.
Warehouse and shipping costs.
Warehouse and delivery costs increased by $1. 6 million or 34. 7%, to $6.
The first quarter of 2014 was $1 million.
The first quarter of 2013 was 5 million.
The percentage of net sales, warehouse and delivery costs is 3. 6% and 3.
The first quarter was 2% and 2013 respectively.
The growth in net sales in the first quarter of 2014 was mainly reflected in :(i)
Increased overtime pay for company fleet drivers, greater use of higher-cost third-party contract drivers in some of our manufacturing and distribution operations, related to a shortage of qualified drivers transporting our products to customers; (ii)
Due to the bad winter weather conditions in the Midwest in 2014, unexpected inefficiencies occurred in our transportation and production plans; and (iii)
In one of our significantly growing distribution operations, distribution-related overhead and assembly costs.
Based on the normal seasonal tracking mode, due to the influence of some of the above factors and the increasing level of demand, we may experience an increase in warehouse and delivery costs in 2014, drivers are out of stock, pressure on freight rates increased.
Sales, general and administration (SG&A)Expenses.
SG & A fee increased by $1. 5 million or 220%, to $8.
The first quarter of 2014 was $5 million.
The first quarter of 2013 was 0 million.
The additional number associated with the recent acquisition increased the stock compensation fee by about $0.
5 million, and the increase in accrued incentive pay associated with higher operating profit levels, resulting in a net increase in sales and administrative wages, as compared to the same period of the previous year, incentives and payroll taxes in 2014.
SG & a expenses as a percentage of net sales are 5.
The first quarter of 2014 was 0%, compared to 4. 9% in 2013.
As noted above, due to the incremental impact of the acquisition completed in 2014, we expect SG & A expenses as A percentage of net sales in 2013 to increase slightly from 2013, increasing sales, compensation and administrative expenses, to support the expected growth.
In addition, in December 2013 and February 2014, several long-term
According to the company\'s 2009 Comprehensive incentive plan, regular equity compensation awards are awarded to motivate, reward and retain certain key leaders in the organization.
The bonus is expected to reach $1.
9 million incremental non
The cash impact of the fiscal year 2014 on SG & A expenses compared to the previous year.
We expect these incremental costs to be offset by the anticipated growth in gross margin for 2014 described earlier.
Amortization of intangible assets.
Amortization of intangible assets increased by $0.
The first quarter of 2014 was 3 million compared with the same period of the previous year, mainly reflecting the impact of the enterprises acquired in 2013 (
Front line, Prime Minister and West side).
Together with 2013 acquisitions, the company confirmed a total of $8.
1 million limited in certain-
Living Intangible assets amortized over a period of three to ten years.
Operating income.
Operating income increased by $1. 4 million or 129% to $11.
The first quarter of 2014 was $8 million.
The previous year was 4 million.
The change in operating income is mainly due to the factors described earlier. Income Taxes.
The estimated effective rate of income tax recorded by the company is 38.
The first quarter of 2014 was 5% per cent, compared with 39% per cent in 2013.
As we continue to refine our national income tax estimates, due to recent acquisition activities and other factors, these estimates are affected by changes in distribution factors between countries, we may experience further fluctuations in our consolidated effective income tax rate for the remainder of 2014.
In the first quarter of 2014, the company achieved a net tax discount of about $1.
0 million related to excess stock returns
As at December 31, 2013, the underlying compensation for deferred tax assets was not recorded, with an estimated effective consolidation of 38 at that time.
The federal and state tax rates are 5%.
This tax benefit was included in shareholders\' equity when it was realized in 2014. Net Income.
Net income for the first quarter of 2014 was $6. $9 million or $0.
The diluted $64 per share compared to $6. $0 million or $0.
55/dilution share is 2013.
Changes in net income for the first quarter of 2014 reflect the impact of the items discussed earlier.
A review of the business unit the company has determined that its reporting department is the department based on its internal reporting methodology, which divides its business by product category and production/distribution process.
The areas of business that the company can report are as follows: Manufacturing-the most important manufacturing department of the company is lamination, which makes use of a variety of materials such as labor, China-
Density cardboard (“MDF”)
Plaster and scrap plates bonded to many products with adhesive or heating process, including vinyl, paper, foil and high
Pressure laminated products.
These products are used to produce furniture, shelves, walls, counters and cabinet products with various finishes and textures.
This section also includes the cabinet door department, the fiberglass bathroom fixtures department, the hardwood furniture department, the vinyl printing department, the solid surface, the granite and quartz manufacturing department, and the external graphics department.
Patrick\'s main manufacturing products also include packaged vinyl, molded paper and hardwood floors, interior channel doors, and slotwall components.
Distribution-company pre-distribution
Finished wall and ceiling panels, drywall and drywall finish products, electronics, wires, electrical and plumbing products, cement siding, interior access doors, roof products, laminate and ceramic floors, shower door furniture, fireplace and slide
Lighting Products, indoor and outdoor, and other miscellaneous products.
Compared to March 30, 2014, sales related to the manufacturing and distribution sector for the first quarter ended 2013 included inter-departmental sales.
Gross profit includes the impact of inter-departmental business activities.
The following table shows information on sales, gross profit and operating income of the company\'s operating department.
Consolidated operating income reconciliation is shown in note 12 to the consolidated financial statements.
End of the first quarter (thousands)
March 30, 2014 March 31, 2013 salesmanufacturingdistributiongross profitmanufacturingdistributionoperating incomemanufacturingdistributionmanufacturingsales.
Sales increased by $17. 3 million or 149%, to $133.
The first quarter of 2014 was $7 million, down from $116.
2013 4 million.
This segment accounted for about 76% of the company\'s net sales in 2014 and 78% in 2013.
In the first quarter of 2014, sales growth reflected a 15% increase in the company\'s revenue from the RV industry, a 7% increase in revenue from the MH industry, and a 24% increase in revenue from the industrial market.
In addition, the bad winter weather in the Midwest caused production and transportation delays in our Indiana business and some of our other regional businesses in January and February.
However, the weather
The related impact has no significant impact on our overall revenue results, as evidenced by the continued seasonal sales growth each month in 2014.
About $5.
9 million of revenue improvement in the first quarter of 2014 was attributed to the incremental contribution of acquisitions completed in 2013 (
Including related market share and industry growth).
The remaining sales increased by $11.
4 million the main reasons for first quarter of 2014 are :(i)
Increase the penetration rate of RV market ,(ii)
In the first quarter of 2014, wholesale unit shipments in the RV and MH industries increased by about 13% and 6% respectively; and (iii)
Improve the retail equipment, residential cabinets and office furniture business in the industrial market.
Excluding the revenue contribution of 2013 acquisitions, the company estimates organic revenue growth in the manufacturing sector in 2014 to be around 10%.
We expect to continue every quarter. over-
Revenue growth for the remaining fiscal year of 2014, compared to the previous year, does not include revenue contributions from acquisitions completed in 2013 and any potential acquisitions in 2014. Gross Profit.
Gross profit increased by $3.
$1 million to $20.
The first quarter of 2014 was $8 million.
The first quarter of 2013 was 7 million.
Gross profit increased to 15 as a percentage of sales.
The first quarter of 2014 was 6%. 2% in 2013.
Gross profit in the first quarter of 2014 has improved mainly due to the following reasons :(i)
Increase in income; (ii)
Impact of the acquisition completed during 2013; (iii)
The profitability of our manufacturing sector in the Midwest has increased, thanks to actions to reduce or eliminate negative profits for certain products; and (iv)
Continuous Organizational and process changes have improved labor efficiency, reduced scrap and return, and improved material production.
Operating income.
Operating income increased by $1.
$4 million to $13.
The first quarter of 2014 was $1 million.
The previous year was 7 million.
The improvement of operating income mainly reflects the increase in the above gross profit, which is partially offset by the following factors :(i)
Higher warehouse and delivery costs as a percentage of net sales, reflecting an increase in overtime pay for company fleet drivers, as well as greater use of costs in certain manufacturing operations related to the driver shortage described earlier; (ii)
Due to the bad winter weather conditions in the Midwest in 2014, unexpected inefficiencies occurred in our transportation and production plans; and (iii)
To a lesser extent, due to the incremental impact of the acquisitions completed in 2013, and increased sales, payroll and administrative expenses to support the expected growth, SG & a expenses as a percentage of net sales
Distribution sales.
Sales increased by $10. 6 million or 33. 5%, to $42.
The first quarter of 2014 was $1 million.
2013 5 million.
This part accounted for about 24% of the Company\'s consolidated net sales in 2014 and about 22% in 2013.
In the first quarter of 2014, sales growth reflected a 43% increase in the company\'s revenue from the RV industry, a 18% increase in revenue from the MH industry and a 24% increase in industrial market revenue.
The acquisition of West End in the third quarter of 2013 was about $4.
Revenue rose 6 million in the first quarter of 2014.
The manufacture marketing game of solid surface manufacturers is changing with each innovation, and businesses of all products need to be ready to pounce.
Huizhou KKR Stone Industry Co., Ltd. seeks to lead the industry by instilling pride in our customers, creating value for the market and sharing responsibility around the world.
Our company specializes in selling solid surface in China as well as providing relevant services.
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