Patrick Industries Inc. (NASDAQ:PATK) Q2 2020 Earnings Conference Call - Final Transcript
Jul 30, 2020 • 10:00 am ET
Andy L. Nemeth
five consecutive weeks on the RV side of the business, and between one and five weeks on the Marine side of the business during the quarter as a result of COVID-19. Our housing and industrial markets experienced production shutdowns as well in certain geographic regions, however, were deemed essential in many territories and ran at reduced production levels during the same time frame.
We focused our efforts on safety protocols during this period, cost reduction efforts in alignment with projected worst-case run rates, consolidation of certain facilities with excess capacities, cash flows, and being in the best position possible to be able to flex back up and take care of our customers once production levels resumed. The resilience, dedication and work ethic exhibited by all of our team members, who, during these unforeseen times, have continued to work so tirelessly every day, both professionally and personally, to support the communities in which we live and work, uphold our values as an organization, show compassion and support diversity and encouragement for one another, as we persevere in this incredibly challenging environment, has been humbling, inspiring and energizing.
We reported profitability, solid cash flows and balance sheet strength during the quarter despite our net sales, gross profit and operating margins being negatively impacted by the business disruption brought on by the previously mentioned unprecedented and rapid shutdowns caused by the pandemic. Our April and May revenues were down 70% and 27%, respectively, and up 6% in June. In May, wholesale projection levels began to resume with sequential week-over-week tailwinds building.
And in June, we experienced a strong resurgence in production rates, particularly in the RV sector, with shipments up 11% compared to the prior year and reflecting the need for inventory as a result of retail resilience and a notable increase in consumer demand, in particular, with new buyers. The diversity of our end markets and geographic regions helped buoy our results in the early part of the quarter, and we were able to quickly accelerate production in response to the swift rebound in demand in multiple end markets later in the quarter. The significant sacrifices by our team members, cost cutting and targeted surgical consolidation initiatives we took in late March and April helped us bolster our ability to weather the impact of COVID-19-related production shutdowns.
Our teams took tiered sequential proactive actions in late March, April and early May by adjusting business models and operations to align with the changing economic landscape. Our second quarter revenues of $424 million decreased 31% versus the prior year, and we earned $0.03 per diluted share, including one-time costs of approximately $4.5 million or $0.12 per diluted share and despite the tremendous headwinds and uncertainty. Liquidity and cash preservation were priorities during the quarter. We paused our strategic initiatives and flexed our business model, voluntary reduced executive and board compensation and focused on maintenance capital expenditures and retaining our core talent.
We returned approximately $6 million of capital to our shareholders via dividends in