Patrick Industries' Q3 2023 net sales were $866 million, a decrease of $246 million, or 22% from $1.11 billion in the Q3 2022. The decline in sales was primarily driven by a decrease in unit shipments across its end markets and lower pricing passed on to its customers to reflect changes in certain commodity costs, partially offset by market share gains.
Operating income of $71 million in the Q3 2023 decreased $22 million from $93 million in the Q3 2022. Operating margin of 8.2% decreased 10 basis points compared to 8.3% in the same period a year ago, primarily due to the impact of lower net sales, absorption on certain fixed distribution expenses, and an increase in non-cash amortization due to acquisitions.
Net income decreased 33% to $40 million from $59 million in the Q3 2022. Diluted earnings per share of $1.81 decreased 26% compared to $2.43 for the Q3 2022.
"Our operating results for the Q3 2023 are a reflection of our team's thoughtful discipline to manage our business and drive resilient operating margins in a very dynamic environment, despite the continued reduction in shipments across our end markets," said Andy Nemeth, CEO. "We have reduced our overall cost structure and reduced our inventory by $150 million from year-end 2022. Our team's focus on labor management, automation, and continuous improvement has helped enable us to dynamically adjust our business to current market demand and industry trends, while remaining opportunistically nimble and poised, ready to pivot when opportunity presents itself or upon an uptick in our markets."
Jeff Rodino, President, said, "We continue to strategically deploy capital and reinvest in the business with the goal of achieving our long-term growth objectives and operational excellence. This focus is also reflected in our repayment of $112 million of long-term debt during the quarter, demonstrating our commitment to maintaining our solid financial foundation and bolstering our ability to seize upon both organic and strategic opportunities. Our acquisition pipeline remains full of potential targets to continue to enhance our outdoor enthusiast platform."
Patrick Industries is a leading component solutions provider for the RV, marine and housing markets. Founded in 1959, Patrick is based in Elkhart, Indiana, employing approximately 10,000 team members throughout the United States.
