Patrick Industries is temporarily suspending operations at certain facilities. The manufacturer and distributor of component and building products for the RV industry cited concern for employee health, changes in customer demand and government mandates as reasons for the production shutdowns. Patrick Industries expressed confidence in the long-term success of the company itself, the RV industry and the other industries its serves.
The production suspensions are being determined on a plant-by-plant basis and are currently expected to range from one to two weeks, Patrick Industries President and CEO Andy Nemeth said. The length of the closures depends on government requirements and market demand. Some facilities will continue to operate if local conditions allow or if they are determined to be supplying products for an essential use, he said.
“We will continue to closely monitor the situation and will take the appropriate actions, as needed, as they relate to our operations, the health and safety of our team members, the communities in which we operate, our customers and all our other stakeholders,” Nemeth said. “We strive to have, and continue to implement, best practices, policies and procedures as they continually evolve in conjunction with guidelines established by the Centers for Disease Control, the World Health Organization, and other government agencies to protect our team members, which is our highest priority.
“We believe we are well-positioned to drive our business and execute off of our operational and financial platforms in this uncertain time as we have a high variable cost, flexible business model firmly in place that allows us to quickly adjust our production levels as market conditions change,” Nemeth further said. “In addition, in partnership with our incredibly dedicated and talented team members, we have enacted certain measures, and are prepared to enact further measures in the event the situation dictates, related to cost reductions in order to align our cost structure over the foreseeable future in correlation with fluctuations in industry demand.”
Patrick Industries has detailed tiered plans for various levels of market volatility, he said. The company put a capital structure in place last September for both strategic and defensive purposes, including for unanticipated situations such as the current COVID-19 situation.
“Our financial position is strong, and we believe we have ample liquidity and availability, supported by cash on hand and available borrowings under our existing revolving credit facility, to not only navigate through the business interruption related to this pandemic crisis for the foreseeable future, but to pivot and execute quickly, returning to our strategic growth plan once visibility and stability in the markets improve,” Nemeth said. “We are optimistic about the long-term prospects for each of our core markets.”
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