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<SEC-DOCUMENT>0000914760-01-000057.txt : 20010409
<SEC-HEADER>0000914760-01-000057.hdr.sgml : 20010409
ACCESSION NUMBER:		0000914760-01-000057
CONFORMED SUBMISSION TYPE:	10-K405
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20001231
FILED AS OF DATE:		20010402

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PATRICK INDUSTRIES INC
		CENTRAL INDEX KEY:			0000076605
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-LUMBER, PLYWOOD, MILLWORK & WOOD PANELS [5031]
		IRS NUMBER:				351057796
		STATE OF INCORPORATION:			IN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K405
		SEC ACT:		
		SEC FILE NUMBER:	000-03922
		FILM NUMBER:		1591417

	BUSINESS ADDRESS:	
		STREET 1:		1800 S 14TH ST
		STREET 2:		P O BOX 638
		CITY:			ELKHART
		STATE:			IN
		ZIP:			46515
		BUSINESS PHONE:		2192947511

	MAIL ADDRESS:	
		STREET 1:		1800 SOUTH 14TH STREET PO BOX 638
		STREET 2:		1800 SOUTH 14TH STREET PO BOX 638
		CITY:			ELKHART
		STATE:			IN
		ZIP:			46515
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>0001.txt
<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
    OF 1934 For the fiscal year ended December 31, 2000

 or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                          Commission file Number 0-3922
                            PATRICK INDUSTRIES, INC.
               (Exact name of Company as specified in its charter)


                  Indiana                                  35-1057796
           (State or other jurisdiction of             (IRS Employer
        incorporation or organization)                identification No.)


 1800 South 14th Street, P.O. Box 638, Elkhart, Indiana          46515
    (Address of principal executive offices)                   (ZIP code)


Company's telephone number, including area code:  (219) 294-7511

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

                         COMMON STOCK, WITHOUT PAR VALUE
                         PREFERRED SHARE PURCHASE RIGHTS
                              (Title of each class)

Indicate by check mark whether the Company (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes      X      No
    -----------    --------

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Company's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K [ X ]


                                       1
<PAGE>


The aggregate market value of the voting stock held by non-affiliates of the
Company on March 23, 2001 (based upon the closing price on NASDAQ and an
estimate that 72.21% of the shares are owned by non-affiliates) was $20,540,482.
The closing market price was $6.313 on that day.

As of March 23, 2001, 4,505,666 shares of the Company's common stock were
outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE.

           Portions of the Company's Proxy Statement for its Annual
           Meeting of Shareholders to be held on May 15, 2001 are
           incorporated by reference into Parts III of this Form
           10-K.

                                       2

<PAGE>


                                     PART I

ITEM 1.  BUSINESS

              The Company is a leading manufacturer and supplier of building
products and materials to the Manufactured Housing and Recreational Vehicle
industries. In addition, the Company is a supplier to certain other industrial
markets, such as furniture manufacturing, marine, architectural, and the
automotive aftermarket. The Company manufactures decorative vinyl and paper
panels, cabinet doors, countertops, aluminum extrusions, drawer sides, pleated
shades, wood adhesives, and laminating machines. The Company is also an
independent wholesale distributor of pre-finished wall and ceiling panels,
particleboard, hardboard siding, passage doors, roofing products, high pressure
laminates, building hardware, insulation, and other related products.

              The Company has a nationwide network of distribution centers for
its products, thereby reducing intransit delivery time and cost to the regional
manufacturing plants of its customers. The Company believes that it is one of
the few suppliers to the Manufactured Housing and Recreational Vehicle
industries that has such a nationwide network. The Company maintains nine
manufacturing plants and a distribution facility near its principal offices in
Elkhart, Indiana, and operates twelve other warehouse and distribution centers
and fourteen other manufacturing plants in twelve other states.

Strategy
- --------

              Over time, the Company has developed very strong working
relationships with its customers. In so doing, the Company has oriented its
business and expansion to the needs of these customers. These customers include
all of the larger Manufactured Housing and Recreational Vehicle manufacturers.
The Company's customers generally demand high quality standards and a high
degree of flexibility from their suppliers. The result has been that the Company
focuses on maintaining and improving the quality of its manufactured products,
and has developed a nationwide manufacturing and distribution presence in
response to its customers' need for flexibility. As the Company explores new
markets and industries, it believes that this nationwide network provides it
with a strong foundation for expansion.

              The Company continually seeks to improve its position as a leading
supplier to the Manufactured Housing and Recreational Vehicle industries and
other industries to which its products, manufacturing processes, or sales and
distribution system are applicable. Currently, approximately 55% of the
Company's sales are to the Manufactured Housing industry, 25% to the
Recreational Vehicle industry, and 20% to other industries. These industries,
and the impact that they have on their suppliers, are characterized by cyclical
demand and production, small order quantities, and short lead times. These
characteristics have an impact on the suppliers, many of whom tend to be small,
regional, and specific product line companies.

              Management has identified several tools which it expects to
utilize to accomplish its operating strategies, including the following:

Diversification into Additional Industries

              While the Company continually seeks to improve its position as a
leading supplier to the Manufactured Housing and Recreational Vehicle
industries, it is also seeking to expand its product lines into other industrial
markets. Many of the Company's products, such as its countertops, cabinet doors,
laminated panels, and shelving, have applications in the furniture and cabinetry
markets. In addition, the manufacturing processes for the Company's aluminum
extrusions are easily applied to the production of products for the marine,
automotive and truck accessories markets and aftermarkets, and many other
markets. The Company's adhesives are produced for almost all industrial
applications.

                                       3
<PAGE>


              Because industrial order size tends to be for larger numbers of
units, the Company enjoys better production efficiencies for these orders. The
Company believes that diversification into additional industries will reduce its
vulnerability to the cyclical nature of the Manufactured Housing and
Recreational Vehicle industries. In addition, the Company believes that it's
nationwide manufacturing and distribution capabilities enable it to more
effectively serve it's customers and position it for product expansion.

Expansion of Manufacturing Capacity

              In the last 4 years, the Company has invested approximately $31.7
million to upgrade existing facilities and equipment and to build new
manufacturing facilities for its laminated paneling products, industrial
adhesives, cabinet doors, and furniture components. In addition, the Company has
invested $9.4 million to purchase existing businesses. The new capacity created
by these investments has enabled the Company to accommodate future growth in the
Company's product lines and markets.

Strategic Acquisitions and Expansion

              The Company supplies a broad variety of building material products
and, with its nationwide manufacturing and distribution capabilities, is
well-positioned for the introduction of new products. The Company, from time to
time, considers the acquisition of additional product lines, facilities or other
assets to complement or expand its existing business. In 1997 the Company
purchased the assets of two pleated shade manufacturers, and in 1998 acquired
the assets of a wood component manufacturer who was a competitor. In 1998 the
Company expanded existing product lines and capacity with the opening of a new
manufacturing and distribution complex in New London, North Carolina. In 1999
the Company expanded the Sun Adhesive facility in Decatur, Alabama to increase
capacity.

Business Segments
- -----------------

            The Company's operations comprise four reportable segments.
Information related to those segments is contained in "Note 15-Segment
Information" appearing herein the financial statements as noted in the index
appearing under Item 14(a)(1) and (2).

Principal Products
- ------------------

              The Company distributes primarily pre-finished wall and ceiling
panels, particleboard, hardboard siding, roofing products, high pressure
laminates, passage doors, building hardware, insulation, and other products.
Through its manufacturing divisions, the Company fabricates decorative vinyl and
paper panels, cabinet doors, shelving, countertops, wood mouldings, aluminum
extrusions, drawer sides, furniture components, wood adhesives, and laminating
presses.

              Pre-finished wall panels contributed more than 10% to total sales.
The percentage contributions of this class of product to total sales was 38.5%,
39.7%, and 42.4% for the years ended December 31, 2000, 1999, and 1998
respectively.

            The Company has no material patents, licenses, franchises, or
concessions and does not conduct significant research and development
activities.

Manufacturing Processes and Operations
- --------------------------------------

              The Company's laminating facilities utilize various materials
including gypsum, particleboard, plywood, and fiberboard which are bonded by
adhesives or a heating process to a number of products


                                       4
<PAGE>

including vinyl, paper, foil, and high pressure laminate. These laminated
products are utilized to produce furniture, shelving, wall, counter, and cabinet
products with a wide variety of finishes and textures.

              The Company's metals division utilizes sophisticated technology to
produce aluminum extrusions for framing and window applications. In addition,
the Company's metals division extrudes running boards, accessories for pick-up
trucks, marine industry products, and construction-related materials.

              The Company manufactures two distinct cabinet door product lines.
One product line is manufactured from raw lumber utilizing solid oak and other
hardwood materials. The Company's other line of doors is made of laminated
fiberboard. The Company's doors are sold mainly to the Manufactured Housing and
Recreational Vehicle industries, and continue to gain acceptance with cabinet
manufacturers and "ready-to-assemble" furniture manufacturers.

            The Company's wood adhesive division, which supplies adhesives used
in most of the Company's manufacturing processes and to outside industrial
customers, uses a process of mixing non-toxic non-hazardous chemicals with water
to produce adhesives sold in tubes, pails, barrels, totes, and rail tank cars.

Markets
- -------

              The Company is engaged in the manufacturing and distribution of
building products and material for use primarily by the Manufactured Housing and
Recreational Vehicle industries and other industrial markets.

Manufactured Housing

              The Manufactured Housing industry has historically served as a
more affordable alternative to the home buyer. Because of the relatively lower
cost of construction as compared to site-built homes, manufactured homes
traditionally have been one of the principal means for first-time home buyers to
overcome the obstacles of large down payments and higher monthly mortgage
payments. Manufactured housing also presents an affordable alternative to
site-built homes for retirees and others desiring a lifestyle in which home
ownership is less burdensome than in the case with site-built homes. The
increase in square footage of living space in manufactured homes created by
multi-sectional models has made them more attractive to a larger segment of home
buyers.

              Manufactured homes are built in accordance with national and state
building codes. Manufactured homes are factory-built and transported to a site
where they are installed, often permanently. Some manufactured homes have design
limitations imposed by the constraints of efficient production and over-the-road
transit. Delivery expense limits the effective competitive shipping range of the
manufactured homes to approximately 400 to 600 miles.

              The Manufactured Housing industry is cyclical, and is affected by
the availability of alternative housing such as apartments, town houses, and
condominiums. In addition, interest rates, availability of financing, regional
population, employment trends, and general regional economic conditions affect
the sale of manufactured homes. The Manufactured Housing Institute reported that
during the four-year period ended December 31, 1991, shipments of manufactured
homes declined 26.6% to a total of approximately 171,000 units nationally in
1991. The reported number of units increased sharply in the five years following
1991, with increases in each of those years. Manufactured home unit shipments in
1999 were 349,000, which was 6.5% lower than 1998, but still 104% more units
than shipped in 1991.

                                       5
<PAGE>


              These cycles have a historic precedent. The Company believes that
the factors responsible for the national decline prior to 1992 included weakness
in the manufacturing, the agricultural, and, in particular, the oil industry
sectors. These industry sectors have historically provided a significant portion
of the Manufactured Housing industry's customer base. Additionally, high vacancy
rates in apartments, high levels of repossession inventories, and over-built
housing markets in certain regions of the country resulted in fewer sales of new
manufactured homes in the past. Changes in these market characteristics had
caused the manufactured housing cycle to change positively until 1999. Beginning
in 1999 and continuing in 2000, the Manufactured Housing industry had to contend
with increased inventory levels at the same time credit requirement became more
stringent and availability of lenders for both retail and dealers was reduced.
This resulted in a decline of nearly 29% in units shipped in 2000.

            Manufactured Housing Shipments:
            ------------------------------
              1990 - 188,200
              1991 - 170,700
              1992 - 210,800
              1993 - 254,300
              1994 - 303,900
              1995 - 339,600
              1996 - 363,400
              1997 - 353,400
              1998 - 372,800
              1999 - 348,700
              2000 - 250,600


Recreational Vehicles

              The Recreational Vehicle industry has been characterized by cycles
of growth and contraction in consumer demand, reflecting prevailing general
economic conditions which affect disposable income for leisure time activities.
Fluctuations in interest rates, consumer confidence, and concerns about the
availability and price of gasoline, in the past, have had an adverse impact on
recreational vehicle sales. Recently the industry has been characterized by
shifting demand towards lower-priced, higher-value products which appeal to
economy-minded, value-conscious buyers.

              Recreational vehicle classifications are based upon standards
established by the Recreational Vehicle Industry Association. The principal
types of recreational vehicles include conventional travel trailers, folding
camping trailers, fifth wheels, motor homes, and van conversions. These
recreational vehicles are distinct from mobile homes, which are manufactured
houses designed for permanent and semi-permanent residential dwelling.

              Conventional travel trailers and folding camping trailers are
non-motorized vehicles which are designed to be towed by passenger automobiles,
pick-up trucks or vans. They provide comfortable, self-contained living
facilities for short periods of time. Conventional travel trailers and folding
camping trailers are towed by means of a frame hitch attached to the towing
vehicle. Fifth wheel trailers, designed to be towed by pick-up trucks, are
constructed with a raised forward section that is attached to the bed area of
the pick-up truck. This allows for a bi-level floor plan and more living space
than a conventional travel trailer.

              A motor home is a self-powered vehicle built on a motor vehicle
chassis. The interior typically includes a driver's area, kitchen, bathroom,
dining, and sleeping areas. Motor homes are self-contained with their own
lighting, heating, cooking, refrigeration, sewage holding, and water storage
facilities. Although they


                                       6
<PAGE>

are not designed for permanent or semi-permanent living, motor homes do provide
comfortable living facilities for short periods of time.

              Van conversions are conventional vans modified for recreational or
other use.

              Sales of recreational vehicle products have been cyclical.
Shortages of motor vehicle fuels and significant increases in fuel prices have
had a material adverse effect on the market for recreational vehicles in the
past, and could adversely affect demand in the future. The Recreational Vehicle
industry is also affected by the availability and terms of financing to dealers
and retail purchasers. Substantial increases in interest rates and decreases in
the general availability of credit have had a negative impact upon the industry
in the past and may do so in the future. Recession and lack of consumer
confidence generally results in a decrease in the sale of leisure time products
such as recreational vehicles. The industry shipped 321,000 units in 1999, which
was 9.7% more than in 1998 and more than any of the last 14 years. Because of
higher interest rates, gasoline prices, and the slower economy, this industry
shipped 6.6% less units in 2000.

            Recreational Vehicle Shipments:
            ------------------------------
              1990 - 173,100
              1991 - 163,300
              1992 - 203,400
              1993 - 227,800
              1994 - 259,200
              1995 - 247,000
              1996 - 247,500
              1997 - 254,500
              1998 - 292,700
              1999 - 321,200
              2000 - 300,100


Other Markets

              Many of the Company's products, such as its countertops, laminated
panels, cabinet doors, and shelving may be utilized in the furniture and
cabinetry markets. The Company's aluminum extrusion process is easily applied to
the production of accessories for pick-up trucks and vans, architectural and
also certain other building products. The Company's adhesives are marketed in
many industrial adhesive markets.

              While demand in these industries also fluctuates with general
economic cycles, the Company believes that these cycles are less severe than
those in the Manufactured Housing and Recreational Vehicle industries. As a
result, the Company believes that diversification into these new markets will
reduce its reliance on the markets it has traditionally served and will mitigate
the impact of their historical cyclical patterns on its operating results.

Marketing and Distribution
- --------------------------

              The Company's sales are to Manufactured Housing and Recreational
Vehicle manufacturers and other building products manufacturers. The Company has
approximately 4,000 customers. The Company has three customers, who together
accounted for approximately 33% and 35% of the Company's total sales in 2000 and
1999. Ten other customers collectively accounted for approximately 22% of 2000
sales. The Company believes it has good relationships with its customers.

                                       7
<PAGE>

              Products for distribution are purchased in carload or truckload
quantities, warehoused, and then sold and delivered by the Company.
Approximately 45% of the Company's distribution segment products are shipped
directly from the suppliers to the customers. The Company typically experiences
a two to four week delay between issuing its purchase orders and delivering of
products to the Company's warehouses or customers. The Company's customers do
not maintain long-term supply contracts, and therefore the Company must bear the
risk of accurate advance estimation of customer orders. The Company maintains a
substantial inventory to satisfy these orders. The Company has no significant
backlog of orders.

              The Company operates thirteen warehouse and distribution centers
and twenty-three manufacturing plants located in Alabama, Arizona, California,
Florida, Georgia, Indiana, Kansas, New Mexico, Nevada, North Carolina, Oregon,
Pennsylvania, and Texas. Through the use of these facilities, the Company is
able to minimize its in-transit delivery time and cost to the regional
manufacturing plants of its customers.

Suppliers
- ---------

              During the year ended December 31, 2000, the Company purchased
approximately 69% of its raw materials and distributed products from twenty
different suppliers. The five largest suppliers accounted for approximately 44%
of the Company's purchases. Materials are primarily commodity products, such as
lauan, gypsum, aluminum, particleboard, and other lumber products which are
available from many suppliers. Alternate sources of supply are available for all
of the Company's important materials.

Competition
- -----------

              The Manufactured Housing and Recreational Vehicle industries are
highly competitive with low barriers to entry. This level of competition carries
through to the suppliers to these industries. Competition is based primarily on
price, product features, quality, and service. The Company has several
competitors in each of its classes of products. Some manufacturers and suppliers
of materials purchased by the Company also compete with it and sell directly to
the same industries. Most of the Company's competitors compete with the Company
on a regional basis. In order for a competitor to compete with the Company on a
national basis, the Company believes that a substantial capital commitment and
experienced personnel would be required. The industrial markets in which the
Company continues to expand are also highly competitive.

Employees
- ---------

              As of December 31, 2000, the Company had 1,343 employees of which
1,111 employees are engaged directly in production, warehousing, and delivery
operations, 54 in sales, and 178 in office and administrative activities. There
are five manufacturing plants and one distribution center covered by collective
bargaining agreements. The Company considers its relationships with its
employees to be good.

              The Company provides retirement, group life, hospitalization, and
major medical plans under which the employee pays a portion of the cost.


                                       8
<PAGE>


ITEM 2.  PROPERTIES AND EQUIPMENT

         As of December 31, 2000, the Company maintained the following
warehouse, manufacturing and distribution facilities:
<TABLE>

                                                                wnership or
Location             Use                     Area Sq. Ft.    Lease Arrangement
- --------             ---                     ------------    -----------------
<S>                  <C>                      <C>            <C>
Goshen, IN           Manufacturing(4)          50,870        Owned
Elkhart, IN          Manufacturing(3)          40,400        Leased to 2003
Elkhart, IN          Mfg. & Dist.(1)(3)       133,600        Leased to 2005
Elkhart, IN          Distribution(1)           39,760        Owned
Elkhart, IN          Manufacturing(3)          30,900        Owned
Elkhart, IN          Manufacturing (2)         42,000        Leased to 2001
Elkhart, IN          Manufacturing(2)          31,000        Leased to 2004
Elkhart, IN          Manufacturing(2)          30,000        Leased to 2003
Elkhart, IN          Manufacturing(4)          36,000        Owned
Elkhart, IN          Manufacturing(4)         109,000        Owned
Elkhart, IN          Admin. Offices            10,000        Owned
Mishawaka, IN        Manufacturing(4)         191,000        Owned, Subject to Mortgage
Decatur, AL          Distribution(1)           30,000        Leased to 2001
Decatur, AL          Manufacturing(2)(4)       35,000        Owned
Decatur, AL          Manufacturing(2)          30,000        Leased to 2001
Decatur, AL          Manufacturing(2)(4)       59,000        Owned
Valdosta, GA         Distribution (1)          20,000        Leased to 2001
Valdosta, GA         Manufacturing(2)          30,800        Owned
New London, NC       Mfg. & Dist.(1)(2)       163,000        Owned, Subject to Mortgage
Halstead, KS         Distribution(1)           36,000        Owned
Waco, TX             Distribution(1)(2)        52,800        Leased to 2004
Waco, TX             Manufacturing(2)          52,800        Leased to 2004
Waco, TX             Manufacturing(2)          21,000        Leased to 2001
Mt. Joy, PA          Distribution(1)(2)        58,500        Owned
Mt. Joy, PA          Manufacturing(2)          30,000        Owned
Ocala, FL            Manufacturing(3)          20,600        Leased to 2004
Ocala, FL            Manufacturing(3)          15,000        Leased to 2001
Ocala, FL            Mfg. & Dist.(1)(2)        55,500        Owned
Fontana, CA          Mfg. & Dist.(1)(2)       110,000        Owned
Fontana, CA          Manufacturing(2)          71,755        Owned
Ontario, CA          Mfg. & Dist.(1)(2)        38,000        Leased to 2002
Woodland, CA         Distribution (1)          10,000        Leased to 2001
Phoenix, AZ          Manufacturing (2)         36,000        Leased to 2002
Phoenix, AZ          Manufacturing (2)         15,700        Leased to 2003
Woodburn, OR         Mfg. & Dist.(1,2,3)      153,000        Owned, Subject to Mortgage
Boulder City, NV     Manufacturing(4)          24,700        Leased to 2004

(1) Distribution center
(2) Vinyl/paper/foil laminating
(3) Cabinet doors and other wood related
(4) Aluminum, adhesives, and other

</TABLE>

                                       9
<PAGE>

         Additionally, the Company operates a distribution center out of a
public warehouse in Belen, New Mexico and has a 43,600 square foot manufacturing
building leased to May, 2002 available for sub-lease. The Company also has a
62,000 square foot vacant building in Bristol, IN for sale. The manufacturing
facility in Goshen, IN is for sale. As of December 31, 2000, the Company owned
or leased 38 trucks, 55 tractors, 93 trailers, 139 forklifts, 3 automobiles and
a corporate aircraft. All owned and leased facilities and equipment are in good
condition and well maintained.


ITEM 3.  LEGAL PROCEEDINGS

       The Company is subject to claims and suits in the ordinary course of
business. In management's opinion, currently pending legal proceedings and
claims against the Company will not, individually or in the aggregate, have a
material adverse effect on the Company's financial condition or results of
operations.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

                  No matters were submitted to a vote of security holders during
the fourth quarter of the fiscal year covered by this report.


                                     * * *


EXECUTIVE OFFICERS OF THE COMPANY

                  The following table sets for the executive officers of the
Company, as of December 31, 2000:

           Name                                Position
           ----                                --------

      David D. Lung               Chief Executive Officer and President

      Keith V. Kankel             Vice President Finance and Secretary-treasurer

      R. Lynn Brandon             Vice President Operations

      Alan M. Rzepka              Vice President Sale & Marketing

David D. Lung (age 53) has served as President and Chief Executive Officer since
December, 2000 and was President and Chief Operating Officer since 1989. Mr.
Lung had held various management positions with the Company before becoming Vice
President of Administration and Purchasing in 1987.

Keith V. Kankel (age 58) has served as Vice President of Finance and
Secretary-treasurer since 1987 and was Secretary-treasurer since 1974.

R. Lynn Brandon (age 49) assumed the position of Vice President of Operations of
the Company in August, 1999. Mr. Brandon was Executive Vice President at
Peters-Remington Furniture Company from 1998 until joining the Company in June
of 1999. Prior to that he was Vice President of Manufacturing for This End Up
Furniture Company since 1987.

Alan M. Rzepka (age 44) assumed the position of Vice President of Sales &
Marketing in May, 2000. Mr. Rzepka was National Sales Manager from January, 1997
to May, 2000 and prior to that was Director of Manufacturing Purchasing since
1994.



                                       10

<PAGE>


                                     PART II


ITEM 5.  MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED SECURITY
                      HOLDER MATTERS

         The Company's common stock is listed on The NASDAQ Stock MarketSM under
the symbol PATK. The high and low trade prices of the Company's common stock as
reported on NASDAQ/NMS for each quarterly period during the last two years were
as follows:
<TABLE>


                1st Quarter         2nd Quarter           3rd Quarter            4th Quarter
<S>         <C>                    <C>                   <C>                    <C>
2000        11.750 -   7.688       7.438 -   6.250       6.844 -   6.438        5.875 -  5.125

1999        16.000 - 12.750       16.250 - 10.750       16.000 - 12.000        14.125 -  7.313

</TABLE>

           The quotations represent prices between dealers, do not include
retail mark-ups, mark-downs or commissions and may not necessarily represent
actual transactions.

           There were approximately 527 holders of the Company's common stock as
of March 16, 2001 as taken from the transfer agent's shareholder listing. It is
estimated that there are approximately 2,000 holders of the Company's common
stock held in street name.

           The Company declared a first time regular quarterly dividend of $.04
per common share starting June 30, 1995 and has continued it through December
31, 2000. Although this is a regular quarterly dividend, any future
determination to pay cash dividends will be made by the Board of Directors in
light of the Company's earnings, financial position, capital requirements, and
such other factors as the Board of Directors deems relevant.


                                       11

<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA

               The following selected financial data for each of the five years
set forth below has been derived from financial statements audited by McGladrey
& Pullen, LLP, independent certified public accountants, certain of which have
been included elsewhere herein. The following data should be read in conjunction
with the Financial Statements and related Notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere herein:

<TABLE>

                                                          As of or for the Year Ended December 31,
                                             2000           1999          1998            1997       1996
                                                           (dollars in thousands, except per share amounts)

<S>                                       <C>            <C>           <C>             <C>          <C>
Net sales                                 $361,620       $457,356      $453,518        $410,567     $403,511
Gross profit                                41,905         57,339        59,556          52,142       53,362
Warehouse and delivery
 expenses                                   15,140         16,715        16,076          15,158       14,645
Selling, general, and
 administrative expenses                    25,241         27,058        26,796          22,145       19,909
Impairment charges                           6,937          - - -         - - -           - - -        - - -
Restructuring charges                          718          - - -         - - -           - - -        - - -
Interest expense, net                        1,224          1,393         1,172           1,149        1,078
Income taxes (credits)                      (2,821)         4,769         6,205           5,396        6,929
Net income (loss)                           (4,534)         7,404         9,307           8,294       10,800
Basic earnings (loss)
 per common share                            (0.89)          1.30          1.58            1.40         1.81
Diluted earnings (loss)
  per common share                           (0.89)          1.29          1.57            1.39         1.80
Weighted average common
 shares outstanding                          5,118          5,714         5,903           5,921        5,967
Cash dividends, per
 common share                                  .16            .16           .16             .16          .16
Working capital                             41,416         47,553        46,698          40,181       45,646
Total assets                               102,520        126,203       127,755         112,187      106,606
Long-term debt                              18,786         22,457        26,129          25,015       26,152
Shareholders' equity                        66,250         79,567        76,307          68,726       62,296

</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                  RESULTS OF OPERATIONS

GENERAL

              The Company's business has shown significant revenue growth since
1991, as net sales increased annually from $143 million to over $457 million in
eight years. However, due to the overall downturn in the Manufactured Housing
and Recreational Vehicle industries, the Company's sales in fiscal 2000 declined
21% from the previous year to $362 million. The downturn in the Manufactured
Housing industry began in the fourth quarter of 1999 due to retail sales lots
being overstocked and unit production being reduced approximately 7% that year.
In fiscal 2000, the industry is down nearly 29% in units shipped and produced
due to limited availability of dealer and retail financing and excessive retail
inventory levels, which include


                                       12
<PAGE>

repossessed units. For the year ended December 31, 2000, the Recreational
Vehicle industry is down nearly 7% in units shipped and produced from the
previous year. These conditions are expected to continue through the end of
fiscal 2001. For the year ended December 31, 2000, the Company's sales are 55%
to Manufactured Housing, 25% to Recreational Vehicle, and 20% to other
industries.

              The following table sets forth the percentage relationship to net
sales of certain items in the Company's statements of operations:

                                                        Year Ended
                                                        December 31,
                                            2000          1999           1998

Net sales                                  100.0%        100.0%         100.0%
Cost of sales                               88.4          87.5           86.9
Gross profit                                11.6          12.5           13.1
Warehouse and delivery                       4.2           3.6            3.5
Selling, general and administrative          7.0           5.9            5.9
Impairment charges                           1.9           - -            - -
Restructuring charges                        0.2           - -            - -
Operating income  (loss)                    (1.7)          3.0            3.7
Net income (loss)                           (1.3)          1.6            2.1


RESULTS OF CONSOLIDATED OPERATIONS

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

           Net Sales. Net sales decreased by approximately $95.7 million, or
20.9%, from $457.3 million for the year ended December 31, 1999 to $361.6
million in the year ended December 31, 2000. In 1999 the Company recorded record
sales in the first half and record sales for the year as a whole. The decrease
in sales from 1999 to 2000 was the result of an approximate 29% decline in units
shipped and produced in the Manufactured Housing industry and an approximate 7%
decline in units shipped and produced in the Recreational Vehicle industry. The
Company's sales for the year were 55% to Manufactured Housing, 25% to
Recreational Vehicle, and 20% to other industries.

           Gross Profit. Gross profit decreased by approximately $15.4 million,
or 26.9%, from $57.3 million in 1999 to $41.9 million in 2000. As a percentage
of net sales, gross profit decreased approximately 0.9% from 12.5% in fiscal
1999 to 11.6% in fiscal 2000. This overall decline in gross profit was due to a
20.9% decrease in net sales and competitive pricing situations nationwide which
made some of the Company's manufacturing operations unprofitable for the year.

           Warehouse and Delivery Expenses. Warehouse and delivery expenses
decreased approximately $1.6 million from $16.7 million in 1999 to $15.1 million
in 2000. As a percentage of net sales these expenses increased approximately
0.6%. The overall decrease is attributable to lower sales levels. The increase
in the percentage to net sales is attributable to higher gasoline costs
specifically related to the increase in gasoline prices from 1999 to 2000, and
higher shipping costs due to the transportation companies running at capacity as
a result of the steady overall economy in fiscal 2000.

                                       13

<PAGE>

           Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased approximately $1.8 million, or 6.7%, from
$27.1 million in 1999 to $25.2 million in 2000. As a percentage of net sales,
selling, general and administrative expenses increased 1.1% from 5.9% in 1999 to
7.0% in 2000. This increase is attributable to reduced sales volumes as a result
of the larger than anticipated decline in shipments in the Manufactured Housing
and Recreational Vehicle industries in fiscal 2000.

           Impairment Charges.  As discussed in Note 11 of the financial
statements, the Company recognized an impairment charge of $6.9 million in the
first quarter of 2000.

           Restructuring Charges. As discussed in Note 11 of the financial
statements, the Company recognized restructuring charges of $718,000 in the
twelve months ended December 31, 2000.

           Operating Income (Loss). The Company experienced an operating loss of
$6.1 million for 2000 compared to operating income of $13.6 million in fiscal
1999. The operating loss for 2000 is due to the asset impairment and
restructuring charges as well as reduced sales, gross profits, and similar
operating costs in fiscal 2000 compared to 1999.

           Interest Expense, Net. Interest expense, net of interest income,
decreased 12.1% from $1.4 million in 1999 to $1.2 million in 2000. This decrease
is attributable to more funds being invested during the year as a result of
reduced working capital needs and lower borrowing levels.

           Net Income (Loss). Net income (loss) decreased $11.9 million, or
161.2% from income of $7.4 million in 1999 to a loss of $4.5 million in fiscal
2000. This reduction is attributable to the factors described above.


Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

           Net Sales. Net sales increased $3.8 million, or 0.8%, from $453.5
million for the year ended December 31, 1998, to $457.3 million in the year
ended December 31, 1999. This increase was the result of record sales in the
first half of 1999, caused by increased production levels in the Manufactured
Housing and Recreational Vehicle industries. In the second half of 1999
production levels in the Manufactured Housing industry were reduced, causing an
approximate 7% decline in that industry for the year. That was the primary
reason the Company also had lower sales in the second half of 1999 compared to
1998. The Company's sales for the year were 67% to Manufactured Housing, 16% to
the Recreational Vehicle , and 17% to other industries.

           Gross Profit. Gross profit decreased by approximately $2.3 million,
or 3.7%, from $59.6 million in 1998, to $57.3 million in the 1999 year. As a
percentage of net sales, gross profit was lower in 1999, going from 13.1% to
12.5%. The decrease in gross profit was due to most manufacturing operations
showing reductions in volume and efficiencies in 1999, especially in the second
half, when compared to 1998. Competitive pricing situations nationwide had a
negative impact on gross profits making several of the Company's manufacturing
operations unprofitable for the year.

           Warehouse and Delivery Expenses. Warehouse and delivery expenses
increased approximately $0.6 million, or 4.0%, from $16.1 million in 1998, to
$16.7 million in 1999. As a percentage of net sales, these expenses increased
because the distribution segment of the Company had sales increases
approximately 8% in 1999 and that segment represents approximately 38% of all
sales.

                                       14

<PAGE>

           Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by $0.3 million, or 1.0%, from $26.8 million
in 1998, to $27.1 million in 1999. As a percentage of sales, both years were
5.9%.

           Operating Income. Operating income was lower by $3.1 million because
of reduced gross profit and higher operating costs. As a percentage of sales,
operating income decreased from 3.7% in 1998 to 3.0% in 1999.

           Interest Expense, Net. Interest expense, net increased by $220,000.
The Company's borrowing level was reduced by over $3.2 million in the last four
months of 1999, but lower invested funds also reduced interest income. Interest
expense in 1998 that related to an expansion project was capitalized and reduced
total interest expense for that year.

           Net Income. Net income decreased by $1.9 million from $9.3 million in
1998 to $7.4 million in 1999. This reduction is attributable to the factors
described above.

BUSINESS SEGMENTS

The Company's reportable segments are as follows:

            Laminating - Utilizes various materials including gypsum,
particleboard, plywood, and fiberboard which are bonded by adhesives or a
heating process to a number of products including vinyl, paper, foil, and high
pressure laminate. These laminated products are utilized to produce furniture,
shelving, wall, counter, and cabinet products with a wide variety of finishes
and textures.

            Distribution - Distributes primarily pre-finished wall and ceiling
panels, particleboard, hardboard and vinyl siding, roofing products, high
pressure laminates, passage doors, building hardware, insulation, and other
products.

            Wood - Uses raw lumber including solid oak, other hardwood
materials, and laminated particleboard or plywood to produce cabinet door
product lines.

            Other - Includes aluminum extrusion, painting and distribution,
manufacture of adhesive products, pleated shades, plastic thermoforming, and
manufacturer of laminating equipment.

            The table below presents information about the revenue and earnings
before interest and taxes of those segments. A reconciliation to consolidated
totals is presented in footnote 15 of the Company's 2000 financial statements.

                                                         Year Ended
                                                         December 31
                                               2000         1999          1998
                                                     (dollars in thousands)
Sales
  Laminating                                 $162,346     $192,033     $198,448
  Distribution                                133,230      185,104      171,700
  Wood                                         35,116       43,667       50,853
  Other                                        53,749       65,128       68,641

                                       15

<PAGE>

Earnings (Loss) Before Interest and Taxes (EBIT)
  Laminating                                 $  1,763     $  5,229       $8,289
  Distribution                                  1,110        4,588        3,480
  Wood                                         (1,596)      (2,572)      (3,019)
  Other                                          (636)       2,623        4,590
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Laminating Segment Discussion

            Net sales were lower by $29.7 million, or 15.5%, from 1999. This was
a result of less demand from the manufactured housing customers as well as the
Company eliminating low margin business.

            EBIT in this segment decreased 66.2%, or $3.5 million, from $5.2
million in 1999 to $1.8 million in 2000. This decrease is the result of
increased material and labor cost and competitive market conditions not allowing
price increases.

Distribution Segment Discussion

            Net sales in 2000 decreased $51.9 million, or 28.0%, from $185.1
million in 1999 to $133.2 million in 2000. This sales decrease is due primarily
to the 29% decline in shipments and production in the Manufactured Housing
industry.

            EBIT in this segment was lower by $3.5 million, or 75.8%, from $4.6
million in 1999 to $1.1 million in 2000. This decline is due to the decrease in
shipments and production in the Manufactured Housing industry as well as lower
margins resulting from competitive market conditions.

Wood Segment Discussion

            Net sales decreased 19.6%, or $8.5 million, in this segment due to a
decline in the overall demand in the Recreational Vehicle industry, which is the
major industry that this segment serves, and the elimination of certain lower
margin business.

            Operating losses in this segment decreased approximately $1.0
million, or 37.9%. This was partially due to reduced depreciation as a result of
the Company recognizing a non-cash accounting charge in the first quarter of
2000 related to an impairment of certain long-lived assets which was recorded as
a Corporate expense. The impairment costs were calculated by estimating
discounted future cash flow and comparing it to the carrying values of these
assets. The result was a one-time charge to operations. Management's continued
commitment to improving operating results in this segment and returning it to
profitability caused the improvement of one of the segment's major operating
units.

Other Segment Discussion

            Net sales were lower in this segment by 17.5%, or $11.4 million,
from $65.1 million in 1999 to $53.7 million in 2000, due to an overall decline
in the industries to which the Company serves.

            EBIT decreased in this segment from operating income of $2.6 million
in 1999 to an operating loss of $636,000 in 2000. This is the result of
competitive pricing situations which negatively affected margins in this
segment, the physical reorganizing of two operating units in this segment, and
the 17.5% reduction in volume in the industries to which this segment serves.


                                       16
<PAGE>


Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Laminating Segment Discussion

            Net sales were lower by 3.2% from 1998. The Company closed an
operation in mid 1998 that resulted in approximately $3.8 million less sales. In
1999 the Company also chose not to keep certain business it had because of low
margins. Certain manufactured housing customers are now using more sheetrock
drywall panels in place of laminated wall panels. Both somewhat reducing this
segment's sales in that year.

            EBIT in this segment decreased 36.9% in 1999 and as a percentage of
sales went from 4.2% to 2.7%. Competitive situations in several laminating
operations caused reduced selling prices and lower margins. A new operation in
this segment had higher than anticipated start-up costs and attempted to produce
new products for new markets, resulting in a large operating loss. Selling and
administrative costs in this segment were similar to those in 1998 with only a
0.2% increase as a percentage of sales due to lower sales.

Distribution Segment Discussion

            Net sales in 1999 increased 7.8% in this segment primarily due to
increased penetration in certain markets with the Company's commodity wood
products. Certain other new products introduced in 1998 and 1999 also
contributed to 1999 increased sales. The core customer base of this segment is
the Manufactured Housing and Recreational Vehicle industries.

            EBIT in the distribution segment increased 31.8% and as a percentage
of sales was 2.5% compared to 2.0% in 1998. Selling and administrative expenses
increased over $800,000 in this segment because of increased allocated corporate
expenses but remained constant as a percentage of sales.

Wood Segment Discussion

            Net sales decreased by $7.2 million, or 14.1%, in 1999. The 1998
sales increase of $14 million, resulting from the acquisition of a competitor,
was not able to be maintained in 1999 due to production problems. Reduced
production in the Manufactured Housing industry in the second half of 1999 also
caused lower sales levels in certain wood operations.

            Operating losses before interest and taxes in this segment continued
at the same level as in 1998, showing 5.9% in both years as a percentage of
sales. Each of the cabinet door operations showed operating losses in 1999
because of competitive pricing pressures, reduced volumes, and one operation
closing certain facilities and consolidating production into one location. The
wood segments not producing cabinet doors showed improvement in operations and
were profitable in 1999. Selling and administrative expenses were lower by
$119,000 and based on lower sales were 7.6% of sales as compared to 6.7% in
1998.

Other Segment Discussion

            Sales were 5.1% less in 1999 in this segment because the Metals
operation lost production days caused by required equipment maintenance, and the
Company's machinery company was being utilized for more intercompany production
than in 1998.

                                       17
<PAGE>

            EBIT in this segment was lower by approximately $2 million and as a
percentage of sales went from 6.7% in 1998 to 4.0% in 1999. Reduced volumes in
the metal manufacturing operation and machinery manufacturing operation reduced
their profitability. The pleated shade operation had operating profits affected
by inefficiencies caused by producing at levels over capacity and also incurring
start-up costs related to an expansion project. A 1998 thermoforming start-up
operation failed to reach profitability in 1999. Selling and administrative
expenses for the other segment increased by 5.7% and 0.9% as a percentage of
sales.


LIQUIDITY AND CAPITAL RESOURCES

           The Company's primary capital requirements are to meet working
capital needs, support its capital expenditure plans, and meet debt service
requirements.

           The Company, in September, 1995, issued to an insurance company in a
private placement $18,000,000 of senior unsecured notes. The ten year notes bear
interest at 6.82%, with semi-annual interest payments that began in 1996 and
seven annual principal repayments of $2,571,060 that began in September, 1999.
These funds were used to reduce existing bank debt and for working capital
needs.

           The Company has an unsecured bank revolving credit agreement that
provides loan availability of $10,000,000 with maturity in the year 2003.

           Pursuant to the private placement and the Credit Agreement, the
Company is required to maintain certain financial ratios, all of which are
currently complied with. The year 2000 impairment of assets, restructuring
charge, and repurchase of the Company's common stock resulted in approximately a
$12,800,000 reduction of shareholders equity. This could cause the Company
sometime in 2001 to be out of compliance with one covenant in the bank
agreement. Although there has been no borrowings under that agreement since
1995, the Company is negotiating certain covenant amendments so compliance can
be maintained. Although there are no assurances that the agreement will be
amended, the Company, at this time, does not foresee any problems.

           The Company's Board of Directors from time to time has authorized the
repurchase of shares of the Company's common stock, in the open market or
through negotiated transactions, at such times and at such prices as management
may decide.

           The Company believes that cash generated from operations and
borrowings under its credit agreements will be sufficient to fund its working
capital requirements, normal recurring capital expenditures, and common stock
repurchase program as currently contemplated. The changes in inventory and
accounts receivable balances, which affect the Company's cash flows, are part of
normal business cycles that cause them to change periodically.


SEASONALITY

           Manufacturing operations in the Manufactured Housing and Recreational
Vehicle industries historically have been seasonal and are generally at the
highest levels when the climate is moderate. Accordingly, the Company's sales
and profits are generally highest in the second and third quarters.

                                       18


<PAGE>

SALE OF PROPERTY

           The Company sold a vacant facility in the fourth quarter of 2000.
This sale resulted in a one-time gain of approximately $.07 per share in the
fourth quarter and the year of 2000.


INFLATION

           The Company does not believe that inflation had a material effect on
results of operations for the periods presented.


SAFE HARBOR STATEMENT

           Statements that do not address historical performance are
"forward-looking statements" within the meaning of the Private Securities
Litigation reform Act of 1995 and are based on a number of assumptions,
including but not limited to; (1) continued domestic economic growth and demand
for the Company's products; (2) the alternatives discussed in regard to the wood
segment; and (3) the Company's belief with respect to its capital expenditures,
seasonality and inflation. Any developments significantly deviating from these
assumptions could cause actual results to differ materially from those forecast
or implied in the aforementioned forward-looking statements.

                                       19
<PAGE>


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

           None


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

           The information required by this item is set forth in Item 14 (a) 1.
on page 22 of this report.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

           None

                                       20
<PAGE>


                                    PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

           The information required by this item with respect to directors is
set forth in the Company's Proxy Statement for the Annual Meeting of
Shareholders to be held on May 15, 2001, under the caption "Election of
Directors," which information is hereby incorporated herein by reference.  The
information with respect to executive officers is set forth at the end of
Part I of this Form 10-K.

ITEM 11.  EXECUTIVE COMPENSATION

           The information required by this item is set forth in Company's Proxy
Statement for the Annual Meeting of Shareholders to be held on May 15, 2001,
under the caption "Compensation of Executive Officers and Directors," which
information is hereby incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

           The information required by this item is set forth in Company's Proxy
Statement for the Annual Meeting of Shareholders to be held on May 15, 2001,
under the caption "Election of Directors," which information is hereby
incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

           The information required by this item is set forth in Company's Proxy
Statement for the Annual Meeting of Shareholders to be held on May 15, 2001,
under the caption "Certain Transactions," which information is hereby
incorporated herein by reference.


                                       21
<PAGE>


                                     PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

                                                                         Page

(a)      1.       FINANCIAL STATEMENTS

                  Independent auditor's report                           F-1

                  Balance sheets -
                   December 31, 2000 and 1999                            F-2

                  Statements of operations-years ended
                    December 31, 2000, 1999, and 1998                    F-3

                  Statements of shareholders' equity-
                   years ended December 31,
                   2000, 1999, 1998                                      F-4

                  Statements of cash flow-
                   years ended December 31,
                   2000, 1999, and 1998                                  F-5

                  Notes to the financial statements                      F-6-20

(a)  2.  FINANCIAL STATEMENT SCHEDULES

                  Independent auditor's report
                   on supplemental schedule & consent                    F-21

                  Schedule II - Valuation and qualifying
                                  accounts and reserves                  F-22


         All other schedules have been omitted as not required, not applicable,
not deemed material or because the information is included in the Notes to
Financial Statements.
(a)  3.  EXHIBITS

         The exhibits listed in the accompanying Exhibit Index on pages 45, 46,
and 47 are filed or incorporated by reference as part of this report.

(b)  REPORTS ON FORM 8-K

         None

                                       22
<PAGE>


SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on the date indicated.

                                         PATRICK INDUSTRIES, INC



                                         By       Mervin D. Lung
                                           -------------------------------------
                                           Mervin D. Lung, Chairman of the Board

Dated:  March 23, 2001


         Pursuant to the Requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated.

         Signature                     Title                        Date

 Mervin D. Lung                Chairman of the Board,            March 23, 2001
       Mervin D. Lung              and Director

David D. Lung                  President, Chief Executive        March 23, 2001
       David D. Lung               Officer, and Director

Keith V. Kankel                Vice President-Finance,           March 23, 2001
       Keith V. Kankel            Principal Accounting
                                  Officer and Director

Thomas G. Baer                 Director                          March 23, 2001
       Thomas G. Baer

Harold E. Wyland               Director                          March 23, 2001
       Harold E. Wyland

Terrence D. Brennan            Director                          March 23, 2001
       Terrence D. Brennan

Walter Wells                   Director                          March 23, 2001
       Walter Wells

Dorothy M. Lung                Director                          March 23, 2001
       Dorothy M. Lung

John H. McDermott              Director                          March 23, 2001
       John H. McDermott

Robert C. Timmins              Director                          March 23, 2001
       Robert C. Timmins

                                       23
<PAGE>

                            PATRICK INDUSTRIES, INC.
                                and subsidiaries

                          consolidated Financial Report

                                DECEMBER 31, 2000



<PAGE>









                                    Contents

- --------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
   ON THE FINANCIAL STATEMENTS                                             F-1
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS

   Consolidated balance sheets                                             F-2
   Consolidated statements of operations                                   F-3
   Consolidated statements of shareholders' equity                         F-4
   Consolidated statements of cash flows                                   F-5
   Notes to financial statements                                      F-6-F-20

- --------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
   ON THE SUPPLEMENTARY INFORMATION                                       F-21
- --------------------------------------------------------------------------------
   SUPPLEMENTARY INFORMATION

   Schedule II - Valuation and qualifying
      accounts and reserves                                               F-22


- --------------------------------------------------------------------------------



<PAGE>






                          Independent Auditor's Report


To the Board of Directors
Patrick Industries, Inc.
Elkhart, Indiana


We  have  audited  the  accompanying  consolidated  balance  sheets  of  Patrick
Industries,  Inc. and  Subsidiaries  as of December  31, 2000 and 1999,  and the
related consolidated  statements of operations,  shareholders'  equity, and cash
flows for each of the years in the  three-year  period ended  December 31, 2000.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.


We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Patrick Industries,
Inc. and Subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the years in the  three-year  period
ended  December 31, 2000,  in  conformity  with  generally  accepted  accounting
principles.









Elkhart, Indiana
February 2, 2001


                                      F-1

<PAGE>

PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

<TABLE>

CONSOLIDATED BALANCE SHEETS
December 31, 2000 and 1999
<CAPTION>

- -----------------------------------------------------------------------------------------
                                                            2000                1999
- -----------------------------------------------------------------------------------------

<S>                                                      <C>                 <C>
ASSETS

Current Assets
 Cash and cash equivalents                               $ 6,716,128         $ 6,686,182
 Trade receivables                                        14,281,674          18,498,685
 Inventories                                              30,937,954          42,039,348
 Income tax refund claims receivable                       1,031,086                   -
 Prepaid expenses                                            770,017             663,189
 Deferred tax assets                                       1,946,000                   -
                                                       ----------------------------------

 Total current assets                                     55,682,859          67,887,404

Property and Equipment, net                               40,589,738          49,895,640

Intangible and Other Assets                                6,247,573           8,420,056
                                                       ----------------------------------

                                                        $102,520,170       $ 126,203,100
                                                       ==================================
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
 Current maturities of long-term debt                    $ 3,671,428         $ 3,671,428
 Accounts payable, trade                                   7,040,285          11,155,999
 Accrued liabilities                                       3,555,008           5,506,326
                                                       ----------------------------------

 Total current liabilities                                14,266,721          20,333,753
                                                       ----------------------------------

Long-Term Debt, less current maturities                   18,785,716          22,457,144
                                                       ----------------------------------

Deferred Compensation Obligations                          2,042,198           1,945,058
                                                       ----------------------------------

Deferred Tax Liabilities                                   1,176,000           1,900,000
                                                       ----------------------------------

Commitments and Contingencies

Shareholders' Equity
 Preferred stock, no par value; authorized
 1,000,000 shares                                                  -                   -
 Common stock, no par value; authorized
 12,000,000 shares; issued 2000 4,568,666
 shares; 1999 5,595,466 shares                            17,689,417          21,389,940
 Retained earnings                                        48,560,118          58,177,205
                                                       ----------------------------------
                                                          66,249,535          79,567,145
                                                       ----------------------------------

                                                        $102,520,170       $ 126,203,100
                                                       ==================================
See Notes to Financial Statements.

</TABLE>

                                      F-2

<PAGE>


PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

<TABLE>

CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2000, 1999, and 1998
<CAPTION>

- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
                                                               2000                1999                1998
- --------------------------------------------------------------------------------------------------------------------

<S>                                                            <C>                <C>                 <C>
Net sales                                                      $361,620,206       $ 457,356,260       $ 453,518,573

Cost of goods sold                                              319,715,214         400,017,287         393,962,419
                                                        ------------------------------------------------------------

 Gross profit                                                    41,904,992          57,338,973          59,556,154
                                                        ------------------------------------------------------------

Operating expenses:
 Warehouse and delivery                                          15,140,245          16,714,651          16,076,212
 Selling, general, and administrative                            25,240,711          27,057,686          26,796,204
 Impairment charges                                               6,937,163                   -                   -
 Restructuring charges                                              717,598                   -                   -
                                                        ------------------------------------------------------------
                                                                 48,035,717          43,772,337          42,872,416
                                                        ------------------------------------------------------------

 Operating income (loss)                                         (6,130,725)         13,566,636          16,683,738

Interest expense, net                                             1,224,145           1,393,346           1,171,967
                                                        ------------------------------------------------------------

 Income (loss) before income
 taxes (credits)                                                 (7,354,870)         12,173,290          15,511,771

Federal and state income taxes (credits)                         (2,821,000)          4,769,000           6,204,700
                                                        ------------------------------------------------------------

 Net income (loss)                                             $ (4,533,870)        $ 7,404,290         $ 9,307,071
                                                        ============================================================

Basic earnings (loss) per common share                              $ (0.89)             $ 1.30              $ 1.58
                                                        ============================================================

Diluted earnings (loss) per common share                            $ (0.89)             $ 1.29              $ 1.57
                                                        ============================================================

See Notes to Financial Statements.


</TABLE>



                                      F-3


<PAGE>

<TABLE>

                                                          2000              1999              1998
                                                    ------------------------------------------------------
<S>                                                         <C>               <C>               <C>
Cost of goods sold:
Total cost of goods sold for reportable
segments                                                    $ 347,570         $ 435,618         $ 437,057
Elimination of intersegment cost of goods
sold                                                          (22,821)          (28,576)          (36,123)
Consolidation reclassifications                                (2,000)           (2,890)           (2,858)
Corporate incentive agreements                                 (2,589)           (3,681)           (3,740)
Other                                                            (445)             (454)             (373)
                                                    ------------------------------------------------------
Consolidated cost of goods sold                             $ 319,715         $ 400,017         $ 393,963
                                                    ======================================================

Earnings before interest and taxes (EBIT):
EBIT for reportable segments                                    $ 641           $ 9,868          $ 13,340
Corporate incentive agreements                                  2,589             3,681             3,740
Consolidation reclassifications                                  (329)             (780)             (173)
Gain (loss) on sale of property
and equipment                                                     617               643               (32)
Impairment charge                                              (6,937)                -                 -
Restructuring charge                                             (718)                -                 -
Other                                                          (1,994)              154              (191)
                                                    ------------------------------------------------------
Consolidated EBIT                                            $ (6,131)         $ 13,566          $ 16,684
                                                    ======================================================

Consolidated assets:
Identifiable assets for reportable segments                  $ 63,163          $ 87,420          $ 69,586
Corporate property and equipment                               23,764            24,693            24,541
Current assets not allocated to segments                        8,518             6,035            25,063
Intangible and other assets not allocated
to segments                                                     6,248             8,420             8,720
Consolidation eliminations                                       (349)             (365)             (155)
                                                    ------------------------------------------------------
Consolidated assets                                         $ 101,344         $ 126,203         $ 127,755
                                                    ======================================================

Depreciation and amortization:
Depreciation for reportable segments                          $ 5,456           $ 5,825           $ 4,952
Corporate depreciation and amortization                         1,942             3,079             2,629
                                                    ------------------------------------------------------
Consolidated depreciation and
amortization                                                  $ 7,398           $ 8,904           $ 7,581
                                                    ======================================================

</TABLE>






                                       F-4

<PAGE>



PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

<TABLE>

SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
December 31, 2000, 1999, and 1998

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
                                                   Balance At                              Deductions          Balance At
                                                   Beginning           Charged To             From                Close
                                                   Of Period           Operations           Reserves            Of Period
- ------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                 <C>                 <C>                 <C>
Allowance for doubtful accounts
- - deducted from trade receiv-
  ables in the balance sheets:
     1998                                         $  125,000          $  235,000          $  235,000          $  125,000
                                                  ==========          ==========          ==========          ==========

     1999                                         $  125,000          $  268,595          $  118,595          $  275,000
                                                  ==========          ==========          ==========          ==========

     2000                                         $  275,000          $  641,676          $  166,676          $  750,000
                                                  ==========          ==========          ==========          ==========


Allowance  for  restructuring
  charges - in accrued
  liabilities  in the balance
  sheets:
     1998                                           $      -            $      -            $      -            $      -
                                                  ==========          ==========          ==========          ==========

     1999                                           $      -            $      -            $      -            $      -
                                                  ==========          ==========          ==========          ==========

     2000                                           $      -          $  714,598          $  588,598          $  126,000
                                                  ==========          ==========          ==========          ==========

</TABLE>



                                      F-5
<PAGE>


PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------

Note 1.  Nature of Business, Use of Estimates, Risks and Uncertainties, and
         Significant Accounting Policies


Nature of business:

The Company's operations consist primarily of the manufacture and distribution
of building products and materials for use primarily by the Manufactured Housing
and Recreational Vehicle industries for customers throughout the United States.
Credit is generally granted on an unsecured basis for terms of 30 days.

Use of estimates:

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Risks and uncertainties:

The Company purchases significant amounts of inventory, which are commodities,
from a limited number of suppliers. The purchase price of such items can be
volatile as it is subject to prevailing market conditions, both domestically and
internationally. The Company's purchases of these items are based on supplier
allocations.

Significant accounting policies:

Principles of consolidation:

The consolidated financial statements include the accounts of Patrick
Industries, Inc. and its wholly- owned subsidiaries, Harlan Machinery Company,
Inc., and Patrick Door, Inc., and its majority-owned subsidiary, Patrick
Mouldings, L.L.C. ("the Company"). All significant intercompany accounts and
transactions have been eliminated in consolidation.

Cash and cash equivalents:

The Company has cash on deposit in financial institutions in amounts which, at
times, may be in excess of insurance coverage provided by the Federal Deposit
Insurance Corporation.

For purposes of the statement of cash flows, the Company considers all overnight
repurchase agreements and commercial paper with a maturity of 30 days or less
acquired in connection with its sweep account arrangements with its bank to be
cash equivalents.


                                      F-6
<PAGE>

PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------


At December 31, 2000 and 1999, the Company owned marketable debt securities in
the total amounts of approximately $4,500,000 and $6,600,000 respectively. These
available for sale debt securities mature in January 2001 and 2000 and bear
interest at a weekly adjusted variable rate which was 6.2% at December 31, 2000
and 5% at December 31, 1999. The securities are stated at fair value which
approximated their cost at December 31, 2000 and 1999. These securities matured
and were sold on January 22, 2001 and January 24, 2000 and have been classified
as a cash equivalent in the accompanying balance sheet.

Inventories:

Inventories are stated at the lower of cost (first-in, first-out (FIFO) method)
or market.

Property and equipment:

Property and equipment is recorded at cost. Depreciation has been computed
primarily by the straight- line method applied to individual items based on
estimated useful lives which generally range from 10 to 40 years for buildings
and improvements and from 3 to 15 years for machinery and equipment,
transportation equipment, and leasehold improvements.

Goodwill:

Goodwill, the excess of cost over the fair value of net assets acquired, is
amortized by the straight-line method over 15-year periods. At each balance
sheet date, management assesses whether there has been a permanent impairment in
the value of goodwill. Factors considered by management include current
operating results, anticipated future cash flows, trends, and prospects, as well
as the effects of obsolescence, demand, competition, and other economic factors.
In the event that an impairment is evident, the Company records an expense for
that impairment.

Revenue recognition:

The Company ships product based on specific orders from customers and revenue is
recognized upon delivery.


<PAGE>

PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------

Earnings per common share:

Following is information about the computation of the earnings per share data
for the years ended December 31, 2000, 1999, and 1998:

<TABLE>

                                                        2000              1999              1998
                                                 -------------------------------------------------------
<S>                                                     <C>               <C>               <C>
Numerator for basic and diluted
earnings per share, net income (loss)                   $(4,533,870)      $ 7,404,290       $ 9,307,071
                                                 =======================================================

Denominator:
Weighted average shares, denominator
for basic earnings per share                              5,118,103         5,714,177         5,902,615

Effect of dilutive potential common
shares, employee stock options (a)                                -            10,867            24,395
                                                 -------------------------------------------------------

Denominator for diluted
    earnings per share                                    5,118,103         5,725,044         5,927,010
                                                 =======================================================

Basic earnings (loss) per share                             $ (0.89)           $ 1.30            $ 1.58
                                                 =======================================================

Diluted earnings (loss) per share                           $ (0.89)           $ 1.29            $ 1.57
                                                 =======================================================


</TABLE>


   (a)      Due to the loss incurred during the year ended December 31, 2000,
            15,715 dilutive potential common shares are not included because the
            effect would be antidilutive.

Note 2.  Balance Sheet Data


Trade receivables:

Trade receivables in the accompanying balance sheets at December 31, 2000 and
1999 are stated net of an allowance for doubtful accounts of $750,000 and
$275,000 respectively.

Inventories:

                                               2000               1999
                                            ----------------------------------

Raw materials                                 $ 17,130,635       $ 23,286,250
Work in process                                  2,040,040          1,555,319
Finished goods                                   4,647,673          4,668,813
Materials purchased for resale                   7,119,606         12,528,966
                                            ----------------------------------
                                              $ 30,937,954       $ 42,039,348
                                            ==================================


                                      F-8
<PAGE>


PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------



Property and equipment:

                                          2000               1999
                                       ----------------------------------

Land and improvements                     $ 3,509,609        $ 3,601,733
Buildings and improvements                 24,487,881         23,975,663
Machinery and equipment                    58,680,294         56,670,702
Transportation equipment                    2,304,343          2,666,259
Leasehold improvements                      3,439,192          3,536,046
                                       ----------------------------------
                                           92,421,319         90,450,403
Less accumulated depreciation              51,831,581         40,554,763
                                       ----------------------------------
                                       ----------------------------------
                                         $ 40,589,738       $ 49,895,640
                                       ==================================


Goodwill, at amortized cost              $ 2,921,060        $ 4,706,976
Cash value of life insurance               2,526,659          2,630,923
Other                                        799,854          1,082,157
                                       ---------------------------------
                                         $ 6,247,573        $ 8,420,056
                                       =================================


Accrued liabilities:


Payroll and related expenses             $ 1,132,012          $ 2,445,031
Property taxes                               879,900              973,600
Other                                      1,543,096            2,087,695
                                       -----------------------------------
                                         $ 3,555,008          $ 5,506,326
                                       ===================================


Note 3.  Pledged Assets and Long-Term Debt


Long-term debt at December 31, 2000 and 1999 is as follows:

<TABLE>

                                                                     2000              1999
                                                                -----------------------------------

<S>                                                                  <C>              <C>
Senior Notes, insurance company                                      $ 12,857,144     $ 15,428,572
Indiana Development Finance Authority Bonds                             1,800,000        2,100,000
State of Oregon Economic Development Revenue Bonds                      3,600,000        4,000,000
State of North Carolina Economic Development Revenue
Bonds                                                                   4,200,000        4,600,000
                                                                -----------------------------------
                                                                       22,457,144       26,128,572
Less current maturities                                                 3,671,428        3,671,428
                                                                -----------------------------------
                                                                -----------------------------------
                                                                     $ 18,785,716     $ 22,457,144
                                                                ===================================
</TABLE>

                                      F-9

<PAGE>


PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------

The senior notes bear interest at a fixed rate of 6.82% and are unsecured. The
notes are due in annual principal installments of $2,571,428 and the final
installment is due September 15, 2005. This agreement requires that the Company
maintain a minimum level of tangible net worth.

The Indiana Development Finance Authority Bonds are payable in annual
installments of $300,000 plus interest at a variable tax exempt bond rate, set
periodically to enable the bonds to be sold at par (5.2% at December 31, 2000).
The final installment is due November 1, 2006. The bonds are collateralized by
real estate and equipment purchased with the bond funds and are backed by a bank
standby letter of credit.

The State of Oregon Economic Development Revenue Bonds are payable in annual
installments of $400,000 plus interest at a variable tax exempt bond rate (5.2%
at December 31, 2000). The final installment is due December 1, 2009. The bonds
are collateralized by real estate and equipment purchased with the bond funds
and are backed by a bank standby letter of credit.

The State of North Carolina Economic Development Revenue Bonds are payable in
annual installments of $400,000 plus quarterly interest payments at a variable
tax exempt bond rate (5.2% at December 31, 2000). Annual payments of $500,000
are due in each of the last two years with a final payment due August 1, 2010.
The bonds are collateralized by real estate and equipment purchased with the
bond funds and are backed by a bank standby letter of credit.

The Company has an unsecured revolving credit agreement which allows borrowings
up to $10,000,000 or a borrowing base defined in the agreement and which expires
on January 28, 2003. Interest on this note is at either prime or the Eurodollar
rate plus .75%. The Company pays .25% of the unused portion of the revolving
line. In addition, this agreement requires the Company to, among other things,
maintain minimum levels of tangible net worth, working capital, and debt to net
worth.

Aggregate maturities of long-term debt for the years ending December 31, 2001
through 2004 are $3,671,428; 2005 $3,671,432; and thereafter $4,100,000.

In addition, the Company is contingently liable for standby letters of credit of
approximately $11,800,000 to meet credit policies of certain suppliers.

Based on the borrowing rates currently available to the Company for loans with
similar terms and average maturities, the fair value of the long-term debt
instruments approximates their carrying value.

Interest expense for the years ended December 31, 2000, 1999, and 1998 was
approximately $1,662,000, $1,826,000, and $1,640,000 respectively.

Note 4.  Equity Transactions

Stock options exercised:

Common stock sold to key employees through the exercise of stock options
resulted in a tax deduction for the Company equivalent to the taxable income
recognized by the employee. For financial reporting purposes, the tax benefit
resulting from this deduction, if material, along with the proceeds from the
exercise of the options, is accounted for as an increase to common stock.

                                      F-10

<PAGE>

PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------


Shareholder Rights Plan:

On February 29, 1996, the Company's Board of Directors adopted a shareholder
rights agreement, granting certain new rights to holders of the Company's common
stock. Under the agreement, one right was granted for each share of common stock
held as of March 20, 1996, and one right will be granted for each share
subsequently issued. Each right entitles the holder, in an unfriendly takeover
situation, and after paying the exercise price (currently $30), to purchase
Patrick common stock having a market value equal to two times the exercise
price. Also, if the Company is merged into another corporation, or if 50 percent
or more of the Company's assets are sold, then rightholders are entitled, upon
payment of the exercise price, to buy common shares of the acquiring
corporation's common stock having a then current market value equal to two times
the exercise price. In either situation, these rights are not available to the
acquiring party. However, these exercise features will not be activated if the
acquiring party makes an offer to acquire the Company's outstanding shares at a
price which is judged by the Board of Directors to be fair to all Patrick
shareholders. The rights may be redeemed by the Company under certain
circumstances at the rate of $.01 per right. The rights will expire on March 20,
2006. The Company has authorized 100,000 shares of preferred stock, Series A, no
par value, in connection with this plan, none of which have been issued.

Repurchase of common stock:

The Company's Board of Directors from time to time has authorized the repurchase
of shares of the Company's common stock, in the open market or through
negotiated transactions, at such times and at such prices as management may
decide.

Note 5.  Commitments and Related Party Leases


The Company leases office, manufacturing, and warehouse facilities and certain
equipment under various noncancelable agreements, which expire at various dates
through 2005. These agreements contain various renewal options and provide for
minimum annual rentals plus the payment of real estate taxes, insurance, and
normal maintenance on the properties. Certain of the leases are with the
chairman/major shareholder and expire at various dates through September 30,
2005.

The total minimum rental commitment at December 31, 2000 under the leases
mentioned above is approximately $7,122,000 which is due approximately
$2,747,000 in 2001, $1,949,000 in 2002, $1,178,000 in 2003, $714,000 in 2004,
$277,000 in 2005, and $257,000 thereafter.

The total rent expense included in the statements of operations for the years
ended December 31, 2000, 1999, and 1998 is approximately $3,900,000, $4,100,000,
and $3,900,000 respectively, of which approximately $1,300,000 each year was
paid to the chairman/major shareholder.

Note 6.  Major Customers


Net sales for the year ended December 31, 2000 included sales to one customer
accounting for 10% or more of the total net sales of the Company for the year.
The percentage of sales to this customer was 14.4%.

                                      F-11

<PAGE>

PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------


Net sales for the year ended December 31, 1999 included sales to two customers,
each of which accounted for 10% or more of the total net sales of the Company
for the year. The percentage of sales for these customers was 11.9% and 10.4%.

Net sales for the year ended December 31, 1998 included sales to two customers,
each of which accounted for 10% or more of the total net sales of the Company
for the year. The percentage of sales for these customers was 12.1%, and 11.3%.

The balances due from these customers at December 31, 2000 and 1999 were not
significant to the total trade receivables balance.

Note 7.  Income Tax Matters


Federal and state income taxes (credits) for the years ended December 31, 2000,
1999, and 1998, all of which are domestic, consist of the following:

<TABLE>

                                                            2000                1999                 1998
                                                     -------------------------------------------------------------
<S>                                                           <C>                <C>                  <C>
Current:
Federal                                                       $ (120,000)        $ 3,600,000          $ 4,704,700
State                                                            (31,000)            943,000              933,000
Deferred                                                      (2,670,000)            226,000              567,000
                                                     -------------------------------------------------------------
                                                            $ (2,821,000)        $ 4,769,000          $ 6,204,700
                                                     =============================================================
</TABLE>


The provisions for income taxes (credits) for the years ended December 31, 2000,
1999, and 1998 are different from the amounts that would otherwise be computed
by applying a graduated federal statutory rate of 35% to income before income
taxes. A reconciliation of the differences is as follows:

<TABLE>

                                                       2000               1999               1998
                                                 --------------------------------------------------------

<S>                                                   <C>                 <C>                <C>
Rate applied to pretax income                         $ (2,570,000)       $ 4,260,000        $ 5,430,000
State taxes, net of federal
tax effect                                                (368,000)           550,000            706,000
Write off of nondeductible goodwill                        121,000                  -                  -
Other                                                       (4,000)           (41,000)            68,700
                                                 --------------------------------------------------------
                                                      $ (2,821,000)       $ 4,769,000        $ 6,204,700
                                                 ========================================================

</TABLE>

Deferred income tax assets and liabilities are computed annually for differences
between the financial statement and tax bases of assets and liabilities that
will result in taxable or deductible amounts in the future based on enacted tax
laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be realized. Income tax
expense is the tax payable or refundable for the current period plus or minus
the change during the period in deferred tax assets and liabilities.


                                      F-12

<PAGE>


PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------

The composition of the deferred tax assets and liabilities at December 31, 2000
and 1999 is as follows:

                                                    2000                1999
                                             -----------------------------------
Gross deferred tax liability,
accelerated depreciation                       $ (1,983,000)       $ (3,926,000)
                                             -----------------------------------
Gross deferred tax assets:
Trade receivables allowance                         296,000             109,000
Inventory capitalization                            308,000             320,000
Accrued expenses                                    696,000             641,000
Deferred compensation                               807,000             768,000
Unvested stock awards                               197,000             155,000
Inventory reserves                                  217,000                   -
AMT credit carryforward                             100,000                   -
Other                                               132,000              33,000
                                             -----------------------------------
                                                  2,753,000           2,026,000
                                             -----------------------------------
Net deferred tax assets (liabilities)             $ 770,000        $ (1,900,000)
                                             ===================================

Note 8.  Self-Insured Plans


The Company has a self-insured health plan for its employees under which there
is both a participant stop loss and an aggregate stop loss based on total
participants. The total annual aggregate liability was approximately $3,900,000
at December 31, 2000. The excess loss portion of the employees' coverage has
been insured with a commercial carrier.

The Company is partially self insured for its workers' compensation liability.
The Company is responsible for a per occurrence limit amount not to exceed
approximately $500,000 individually and $2,800,000 in aggregate annually. The
excess loss portion of the employees' coverage has been insured with a
commercial carrier.

The Company has accrued an estimated liability for these benefits based upon
claims incurred.

Note 9.  Compensation Plans


Deferred compensation obligations:

The Company has deferred compensation agreements with certain key employees. The
agreements provide for monthly benefits for ten years subsequent to retirement,
disability, or death. The Company has accrued an estimated liability based upon
the present value of an annuity needed to provide the future benefit payments.

Bonus plan:

The Company pays bonuses to certain management personnel. Historically, bonuses
are determined annually and are based upon corporate and divisional income
levels. The charge to operations amounted to approximately $560,000, $2,170,000,
and $2,200,000 for the years ended December 31, 2000, 1999, and 1998
respectively.

                                      F-13
<PAGE>


PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------

Profit-sharing plan:

The Company has a qualified profit-sharing plan, more commonly known as a 401(k)
plan, for substantially all of its employees with over one year of service and
who are at least 21 years of age. The plan provides for a matching contribution
by the Company as defined in the agreement and, in addition, provides for a
discretionary contribution annually as determined by the Board of Directors. The
amounts of contributions for the years ended December 31, 2000, 1999, and 1998
were immaterial.

Stock option plan:

At December 31, 2000, the Company has a stock option plan with shares of common
stock reserved for options to key employees. As permitted under generally
accepted accounting principles, grants under this plan are accounted for
following APB Opinion No. 25 and related interpretations. Accordingly, no
compensation cost has been recognized for grants under the plan. Had
compensation cost for the plans been determined based on the grant date fair
values of awards (the method described in FASB Statement No. 123), reported net
income and earnings per common share would have been reduced to the pro forma
amounts shown below:

<TABLE>

                                                         2000                1999               1998
                                                  ----------------------------------------------------------
<S>                                                      <C>                 <C>                <C>
Net income (loss):
As reported                                              $ (4,533,870)       $ 7,404,290        $ 9,307,071
Pro forma                                                  (4,895,300)         7,060,174          9,307,071

Primary earnings (loss) per share:
As reported                                                   $ (0.89)            $ 1.30             $ 1.58
Pro forma                                                       (0.96)              1.24               1.58

Fully diluted earnings (loss) per share:
As reported                                                   $ (0.89)            $ 1.29             $ 1.57
Pro forma                                                       (0.96)              1.23               1.57

</TABLE>



The fair value of each grant is estimated at the grant date using the
Black-Scholes option-pricing model with the following assumptions for 2000:
dividend rate of 2.25% for all years; risk-free interest rate of 5.25%; expected
lives of 5 years; and price volatility of 43%.


                                      F-14
<PAGE>


PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------

Following is a summary of transactions of granted shares under option for the
years ended December 31, 2000, 1999 and 1998:
<TABLE>


                                          2000                      1999                      1998
                                      -----------------------------------------------------------------------------
                                                     Weighted                  Weighted                   Weighted
                                                     Average                   Average                   Average
                                                     Exercise                  Exercise                   Exercise
                                         Shares        Price       Shares        Price       Shares        Price
                                      -----------------------------------------------------------------------------

<S>                                        <C>           <C>          <C>          <C>          <C>           <C>
Outstanding, beginning
of year                                    417,500       $14.13       88,500       $10.75       96,000        $10.75
Issued during the year                     115,000         6.13      352,500        14.75            -             -
Canceled during the year                   (80,000)       11.50      (21,000)       10.75            -             -
Exercised during the year                        -            -       (2,500)       10.75       (7,500)        10.75
                                      -----------------------------------------------------------------------------
Outstanding, end of year                   452,500       $12.55      417,500       $14.13       88,500        $10.75
                                      ===============================================================================

Eligible, end of year for
exercise                                    84,375       $14.75       65,000       $10.75       88,500        $10.75
                                      ===============================================================================

Weighted average fair value
of options granted during
the year                                   N/A            $2.07      N/A           $ 7.26      N/A          N/A
                                      ===============================================================================

</TABLE>

A further summary about fixed options outstanding at December 31, 2000 is as
follows:

<TABLE>

                                               Options Outstanding                        Options Exercisable
                                          ------------------------------------------------------------------------
                                                            Weighted
                                                            Average       Weighted                     Weighted
                                                           Remaining      Average                      Average
                                              Number      Contractual     Exercise       Number        Exercise
                                            Outstanding       Life         Price       Exercisable      Price
                                          ------------------------------------------------------------------------

<S>               <C>                            <C>               <C>       <C>             <C>          <C>
Exercise price of $14.75                         337,500           8.5       $ 14.75         84,375       $ 14.75
                                          ========================================================================

Exercise price of $6.125                         115,000           9.5       $ 6.125              -           $ -
                                          ========================================================================

</TABLE>



Theses options were included in computing diluted earnings per common share as
shown on the consolidated statements of income.

Stock award plan:

The Company has adopted a stock award plan for the seven existing non-employee
directors. Grants awarded during May 2000 and May 1999 of 24,000 and 18,000
shares respectively are subject to forfeiture in the event the recipient
terminates as a director within two years from the date of grant. The related
compensation expense is being recognized over the two-year vesting period.


                                      F-15

<PAGE>


PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------


Note 10. Business Combination


In April 1998, the Company acquired for cash all of the assets and liabilities
of Woodtek, L.L.C., a manufacturer of wood products. The total acquisition cost
was $2,581,490. The acquisition has been accounted for as a purchase and the
results of operations of Woodtek, L.L.C. since the date of acquisition are
included in the consolidated financial statements.

Note 11. Asset Impairments and Restructurings


During 2000, the Company recorded asset impairments of $6,937,163 (approximately
$4,283,000 after tax or $.84 per share) and restructuring charges of $717,598
(approximately $430,600 after tax or $.08 per share).

Asset impairment charges were required to write down the net book values of
long-lived assets primarily in the Company's Wood and Other Segments
(approximately $5,371,000 and $1,566,000 respectively). Estimated future cash
flows of these operations had indicated that an impairment had occurred.

Restructuring charges were incurred from the strategic decisions to close a
manufacturing plant in the Wood Segment, moving manufacturing to other existing
plant locations, the merging of certain facilities in the Southeast to gain
operating efficiencies, and the closing of an unprofitable manufacturing
facility in the Other Segment. The charges include severance payments, writedown
of obsolete inventories, and future rental commitments related to the closed
facilities. The remaining restructuring reserves amount to approximately
$400,000 and are expected to be utilized by the second quarter 2001. The
majority of the cost savings related to these plans will be realized in 2001 and
beyond.

Note 12. Contingencies


The Company is subject to claims and suits in the ordinary course of business.
In management's opinion, currently pending legal proceedings and claims against
the Company will not, individually or in the aggregate, have a material adverse
effect on the Company's financial condition or results of operations.

Note 13. Cash Flows Information


Supplemental information relative to the statements of cash flows for the years
ended December 31, 2000, 1999, and 1998 is as follows:

<TABLE>

                                                        2000              1999              1998
                                                  -------------------------------------------------------
<S>                                                      <C>              <C>                <C>
Supplemental disclosures of cash
flows information:
Cash payments for:
Interest                                                 $ 1,275,745      $ 1,597,626        $ 1,621,879
                                                  =======================================================

Income taxes                                             $ 1,248,811      $ 4,850,244        $ 6,359,279
                                                  =======================================================

Business acquisitions:
Cash purchase price                                              $ -              $ -        $ 2,581,490
                                                  =======================================================

Working capital acquired                                         $ -              $ -        $ 1,081,490
Fair value of long-lived assets acquired                           -                -          1,500,000
                                                  -------------------------------------------------------
                                                                 $ -              $ -        $ 2,581,490
                                                  =======================================================

</TABLE>


                                      F-16
<PAGE>


PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------


The changes in assets and liabilities in arriving at net cash provided by
operating activities are net of amounts related to acquisitions.

Note 14. Unaudited Interim Financial Information


Presented below is certain selected unaudited quarterly financial information
for the years ended December 31, 2000 and 1999 (dollars in thousands, except per
share data):

<TABLE>

                                                Quarter Ended
                              ----------------------------------------------------------
                              March 31,      June 30,       September 30,   December 31,
                              ----------------------------------------------------------
                                                       2000
                              ----------------------------------------------------------

<S>                           <C>            <C>            <C>            <C>
Net Sales                     $ 99,824       $  100,902     $  89,945      $  70,949
Gross Profit                    10,753           12,566        11,122          7,463
Net income (loss)               (4,602)             880           605         (1,417)
Earnings loss per common share   (0.86)            0.16          0.11          (0.30)
Weighted average common
 shares outstanding          5,346,346        5,268,666     5,141,275      4,720,242

</TABLE>

<TABLE>

                                                Quarter Ended
                              ----------------------------------------------------------
                              March 31,      June 30,       September 30,   December 31,
                              ----------------------------------------------------------
                                                       1999
                              ----------------------------------------------------------

<S>                           <C>            <C>            <C>            <C>
Net Sales                     $107,352       $  123,029     $ 116,981      $ 109,994
Gross Profit                    13,984           16,270        13,490         13,595
Net income (                     2,211            2,659         1,337          1,197
Earnings per common share         0.38             0.47          0.23           0.21
Weighted average common
 shares outstanding          5,786,480        5,685,715     5,695,539      5,690,237

</TABLE>

Note 15. Segment Information


The Company has determined that its reportable segments are those that are based
on the Company's method of internal reporting, which segregates its business by
product category and production/ distribution process. The Company's reportable
segments are as follows:

     Laminating -- Utilizes various materials including gypsum, particleboard,
     plywood, and fiberboard which are bonded by adhesives or a heating process
     to a number of products including vinyl, paper foil, and high pressure
     laminate. These laminated products are utilized to produce furniture,
     shelving, wall, counter, and cabinet products with a wide variety of
     finishes and textures.

     Distribution -- Distributes primarily pre-finished wall and ceiling panels,
     particleboard, hardboard, and vinyl siding, roofing products, passage
     doors, building hardware, insulation, and other products.

                                      F-17

<PAGE>

PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------


     Wood -- Uses raw lumber including solid oak as well as other hardwood
     materials or laminated particleboard or plywood to produce cabinet door
     product lines.

     Other -- Includes aluminum extruding, painting and distributing divisions,
     an adhesive division, a pleated shade division, a plastic thermoforming
     division, and a machine manufacturing division.

The accounting policies of the segments are the same as those described in
"Significant Accounting Policies," except as described below. Segment data
includes intersegment revenues, as well as a charge allocating a majority of the
corporate costs to each of its operating segments. Assets are identified with
the segments with the exception of cash, and land and buildings, which are
identified with the corporate division. The corporate division charges rents to
the segment for use of the land and buildings based upon market rates. The
Company accounts for intersegment sales as if the sales were to third parties,
that is, at current market prices. The Company also records income from purchase
incentive agreements as corporate division revenue. The Company evaluates the
performance of its segments and allocates resources to them based on a variety
of indicators including revenues, cost of goods sold, earnings before interest
and taxes (EBIT), and total identifiable assets.

The table below presents information about the net income (loss) and segment
assets used by the chief operating decision makers of the Company as of and for
the years ended December 31, 2000, 1999, and 1998.

<TABLE>

                             Laminating   Distribution      Wood         Other        Total
                             ------------------------------------------------------------------
                                                            2000
                             ------------------------------------------------------------------

<S>                            <C>           <C>            <C>          <C>          <C>
Sales                          $ 156,525     $ 133,174      $ 34,050     $ 37,855     $ 361,604
Sales, intersegment                5,821            56         1,066       15,894        22,837
                             ------------------------------------------------------------------
Total sales                      162,346       133,230        35,116       53,749       384,441

Cost of goods sold               146,538       120,534        32,735       47,763       347,570

EBIT                               1,763         1,110        (1,596)        (636)          641

Identifiable assets               32,368        13,177         6,132       11,486        63,163

Depreciation                       2,668           457           947        1,384         5,456

</TABLE>

                                      F-18
<PAGE>


PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------


<TABLE>

                             Laminating   Distribution      Wood         Other        Total
                             ------------------------------------------------------------------
                                                                 1999
                             ------------------------------------------------------------------

<S>                            <C>           <C>            <C>          <C>          <C>
Sales                          $ 185,300     $ 185,053      $ 42,458     $ 43,747     $ 456,558
Sales, intersegment                6,733            51         1,209       21,381        29,374
                             ------------------------------------------------------------------
Total sales                      192,033       185,104        43,667       65,128       485,932

Cost of goods sold               171,288       167,507        41,639       55,184       435,618

EBIT                               5,229         4,588        (2,572)       2,623         9,868

Identifiable assets               39,750        20,270        11,956       15,444        87,420

Depreciation                       2,398           437         1,630        1,360         5,825

</TABLE>


<TABLE>

                               Laminating     Distribution      Wood       Other      Total
                             ------------------------------------------------------------------
                                                               1998
                             ------------------------------------------------------------------

<S>                                <C>                         <C>         <C>          <C>
Sales                          $ 190,204     $ 171,700      $ 45,019     $ 45,717    $ 452,640
Sales, intersegment                8,244             -         5,834       22,924       37,002
Total sales                      198,448       171,700        50,853       68,641      489,642

Cost of goods sold               174,673       156,303        49,061       57,020      437,057

EBIT                               8,289         3,480        (3,019)       4,590       13,340

Identifiable assets               32,181        14,480        10,965       11,960       69,586

Depreciation                       1,982           367         1,349        1,254        4,952

</TABLE>


A reconciliation of total segment sales, cost of goods sold, and EBIT to
consolidated sales, cost of goods sold, and segment information to the
consolidated financial statements as of and for the years ended December 31,
2000, 1999, and 1998 is as follows (dollars in thousands):

<TABLE>

<S>                                                         <C>               <C>               <C>
Sales:
Total sales for reportable segments                         $ 384,441         $ 485,932         $ 489,642
Elimination of intersegment revenue                           (22,821)          (28,576)          (36,123)
                                                    ------------------------------------------------------
                                                    ------------------------------------------------------
Consolidated sales                                          $ 361,620         $ 457,356         $ 453,519
                                                    ======================================================

</TABLE>

                                      F-19

<PAGE>



PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

Notes to Financial Statements

- --------------------------------------------------------------------------------

<TABLE>

                                                          2000              1999              1998
                                                    ------------------------------------------------------
<S>                                                         <C>               <C>               <C>
Cost of goods sold:
Total cost of goods sold for reportable
segments                                                    $ 347,570         $ 435,618         $ 437,057
Elimination of intersegment cost of goods
sold                                                          (22,821)          (28,576)          (36,123)
Consolidation reclassifications                                (2,000)           (2,890)           (2,858)
Corporate incentive agreements                                 (2,589)           (3,681)           (3,740)
Other                                                            (445)             (454)             (373)
                                                    ------------------------------------------------------
Consolidated cost of goods sold                             $ 319,715         $ 400,017         $ 393,963
                                                    ======================================================

Earnings before interest and taxes (EBIT):
EBIT for reportable segments                                    $ 641           $ 9,868          $ 13,340
Corporate incentive agreements                                  2,589             3,681             3,740
Consolidation reclassifications                                  (329)             (780)             (173)
Gain (loss) on sale of property
and equipment                                                     617               643               (32)
Impairment charge                                              (6,937)                -                 -
Restructuring charge                                             (718)                -                 -
Other                                                          (1,994)              154              (191)
                                                    ------------------------------------------------------
Consolidated EBIT                                            $ (6,131)         $ 13,566          $ 16,684
                                                    ======================================================

Consolidated assets:
Identifiable assets for reportable segments                  $ 63,163          $ 87,420          $ 69,586
Corporate property and equipment                               23,764            24,693            24,541
Current assets not allocated to segments                        8,518             6,035            25,063
Intangible and other assets not allocated
to segments                                                     6,248             8,420             8,720
Consolidation eliminations                                       (349)             (365)             (155)
                                                    ------------------------------------------------------
Consolidated assets                                         $ 101,344         $ 126,203         $ 127,755
                                                    ======================================================

Depreciation and amortization:
Depreciation for reportable segments                          $ 5,456           $ 5,825           $ 4,952
Corporate depreciation and amortization                         1,942             3,079             2,629
                                                    ------------------------------------------------------
Consolidated depreciation and
amortization                                                  $ 7,398           $ 8,904           $ 7,581
                                                    ======================================================


</TABLE>

                                      F-20


<PAGE>

                       Independent Auditor's Report on the
                        supplemental schedule and consent


To the Board of Directors
Patrick Industries, Inc.
Elkhart, Indiana


Our audits of the consolidated financial statements of Patrick Industries, Inc.
and Subsidiaries included Schedule II, contained herein, for each of the years
in the three-year period ended December 31, 2000. Such schedule is presented for
purposes of complying with the Securities and Exchange Commission's rule and is
not a required part of the basic consolidated financial statements. In our
opinion, such schedule presents fairly the information set forth therein, in
conformity with generally accepted accounting principles.


We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (File No. 333-04187) and in the related Prospectus of our
report, dated February 2, 2001, with respect to the consolidated financial
statements and schedule of Patrick Industries, Inc. and Subsidiaries included in
this Annual Report on Form 10-K for the year ended December 31, 2000.








                             McGLADREY & PULLEN, LLP






Elkhart, Indiana
April 2, 2001



                                      F-21

<PAGE>


PATRICK INDUSTRIES, INC.
AND SUBSIDIARIES

<TABLE>

SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
December 31, 2000, 1999, and 1998

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
                                                   Balance At                              Deductions          Balance At
                                                   Beginning           Charged To             From                Close
                                                   Of Period           Operations           Reserves            Of Period
- ------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                 <C>                 <C>                 <C>
Allowance for doubtful accounts
- - deducted from trade receiv-
  ables in the balance sheets:
     1998                                         $  125,000          $  235,000          $  235,000          $  125,000
                                                  ==========          ==========          ==========          ==========

     1999                                         $  125,000          $  268,595          $  118,595          $  275,000
                                                  ==========          ==========          ==========          ==========

     2000                                         $  275,000          $  641,676          $  166,676          $  750,000
                                                  ==========          ==========          ==========          ==========


Allowance  for  restructuring
  charges - in accrued
  liabilities  in the balance
  sheets:
     1998                                           $      -            $      -            $      -            $      -
                                                  ==========          ==========          ==========          ==========

     1999                                           $      -            $      -            $      -            $      -
                                                  ==========          ==========          ==========          ==========

     2000                                           $      -          $  714,598          $  588,598          $  126,000
                                                  ==========          ==========          ==========          ==========

</TABLE>

                                      F-22

<PAGE>


                                INDEX TO EXHIBITS

Exhibit Number                      Exhibits
- --------------                      --------

      3(a)     -Amended Articles of Incorporation of the Company as further
               amended (filed as Exhibit 3(a) to the Company's Form 10-K/A-1
               amending its report on Form 10-K for the fiscal year ended
               December 31, 1992 and incorporated herein by reference)
               ...........

      3(b)     -By-Laws of the Company (filed as Exhibit 3(b) to the Company's
               Form 10-K/A-1 amending its report on Form 10-K for the fiscal
               year ended December 31, 1992 and incorporated herein by
               reference) ...........

      3(c)     - Preferred Share Purchase Rights Agreement (filed
               April 3, 1996 on Form 8-A and incorporated herein by reference)
               .......

      10(a)    -Second Amendment to February 2, 1994 Credit Agreement, dated as
               of June 26, 1995 among the Company, NBD Bank, as agent, and NBD
               Bank, N.A. (filed as Exhibit 10(a) to the Company's Form 10-K for
               the fiscal year ended December 31, 1995 and incorporated herein
               by reference) ...........

      10(b)    -Note Agreement, dated September 1, 1995, between the Company and
               Nationwide Life Insurance Company (filed as Exhibit 10(b) to the
               Company's Form 10-K for the fiscal year ended December 31, 1995
               and incorporated herein by reference) ...........

      10(c)    -Commercial Lease and Option to Purchase dated as of October 1,
               1995 between Mervin Lung Building Company, Inc., as lessor, and
               the Company, as lessee (filed as Exhibit 10(c) to the Company's
               Form 10-K for the fiscal year ended December 31, 1995 and
               incorporated herein by reference) ...........

      10(d)    -First Amendment to Credit Agreement, dated as of October 27,
               1994 among the Company, NBD Bank, as agent, and NBD Bank, N.A.
               (filed as Exhibit 10(a) to the Company's Form 10-K for the fiscal
               year ended December 31, 1994 and incorporated herein by
               reference) ...........

      10(e)    -Loan Agreement dated as of December 1, 1994 between the State of
               Oregon Economic Development Commission, along with the Pledge and
               Security Agreement relating thereto (filed as Exhibit 10(b) to
               the Company's Form 10-K for the fiscal year ended December 31,
               1994 and incorporated herein by reference) ...........

      10(f)    -Credit Agreement dated as of February 2, 1994 among the
               Company, NBD Bank, as agent, and NBD Bank, N.A. (filed as Exhibit
               10(a) to the Company's Form 10-K for the fiscal year ended
               December 31, 1993 and incorporated herein by reference) .........

<PAGE>



      Exhibit Number                     Exhibits
      --------------                     --------

      10(g)    -Loan Agreement dated as of November 1, 1991 between the Company
               and the Indiana Development Finance Authority, along with the
               Pledge and Security Agreement relating thereto (filed as Exhibit
               10(c) to the Company's Form 10-K/A-1 amending its report on Form
               10-K for the fiscal year ended December 31, 1992 and incorporated
               herein by reference) .....

      *10(h)   -Patrick Industries, Inc. 1987 Stock Option Program, as amended
               (filed as Exhibit 10(e) to the Company's Form 10-K for the fiscal
               year ended December 31, 1994 and incorporated herein by
               reference) ...........

      *10(i)   -Patrick Industries, Inc. 401(k) Employee Savings Plan (filed as
               Exhibit 10(a) to the Company's Form 10-K for the fiscal year
               ended December 31, 1993 and incorporated herein by reference)
               ...........

      *10(j)   -Form of Employment Agreements with Executive Officers (filed as
               Exhibit 10(e) to the Company's Form 10-K/A-1 amending its report
               on Form 10-K for the fiscal year ended December 31, 1992 and
               incorporated herein by reference) .....

      *10(k)   -Form of Deferred Compensation Agreements with Executive Officers
               (filed as Exhibit 10(f) to the Company's Form 10-K/A-1 amending
               its report on Form 10-K for the fiscal year ended December 31,
               1992 and incorporated herein by reference) ...........

      10(l)    -Commercial Lease and dated as of October 1, 1994 between Mervin
               D. Lung, as lessor, and the Company, as lessee (filed as Exhibit
               10(k) to the Company's Form 10-K for the fiscal year ended
               December 31, 1994 and incorporated herein by reference)
               ...........

      10(m)    -Commercial Lease dated September 1, 1994 between Mervin D. Lung
               Building Company, Inc., as lessor, and the Company, as lessee
               (filed as Exhibit 10(l) to the Company's Form 10-K for the fiscal
               year ended December 31, 1994 and incorporated herein by
               reference) ...........

      10(n)    -Commercial Lease dated November 1, 1994 between Mervin D. Lung
               Building Company, Inc., as lessor, and the Company, as lessee
               (filed as Exhibit 10(m) to the Company's Form 10-K for the fiscal
               year ended December 31, 1994 and incorporated herein by
               reference) ...........

      10(o)    -Commercial Lease dated October 1, 1999 between Mervin D. Lung,
               as lessor, and the Company, as lessee (filed as Exhibit 10(o)
               to the Company's Form 10-K for the fiscal year ended December
               31, 1999 and incorporated herein by reference) ..........

      10(p)**  -Commercial Lease dated September 1, 2000 between Mervin D. Lung
               Building Company, Inc., as lessor, and the Company, as
               lessee..........


<PAGE>



      10(q)**  -Commercial Lease dated November 1, 2000 between Mervin D. Lung
               Building Company, Inc., as lessor, and the Company, as
               lessee..........

      10(r)**  -Credit Agreement dated as of January 28, 2000 among the
               Company, Bank One, Indiana, N.A...........

         12**  -Computation of Operating Ratios ...........

         23    -Consent of accountants (included in Independent auditor's report
               on supplemental schedule & consent on page F-21) .....


 *Management contract or compensatory plan or arrangement
**Filed herewith


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(P)
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>COMMERCIAL LEASE DATED SEPTEMBER 1, 2000
<TEXT>



                                 COMMERCIAL LEASE
                                 ----------------

                  THIS AGREEMENT, made and entered into this First day of
September 2000, between MERVIN D. LUNG BUILDING COMPANY, INC., an Indiana
Corporation, of St. Joseph County, State of Indiana, hereinafter know as
"LESSOR", and PATRICK INDUSTRIES, INC., an Indiana Corporation with principal
offices in Elkhart County, Indiana, hereinafter referred to as "LESSEE", for and
in consideration of the covenants and agreements hereinafter mentioned, that
real estate located in Elkhart County, State of Indiana, and more particularly
described in

ITEM 1.  LEASED PREMISES.

                  WHEREAS, LESSOR is owner of certain property situated in
Elkhart, Indiana; and

                  WHEREAS, LESSEE is desirous of leasing said property.

                  NOW, THEREFORE, in consideration of the mutual promises
hereinafter contained with applicable ordinances, laws and regulations, the
parties agree as follows:

                  1. LEASED PREMISES: the LESSOR hereby leases to LESSEE those
premises bearing the street address of 29183 Lexington Park Drive, Elkhart,
Indiana, more particularly described as follows:

                  Part of the Northeast Fractional Quarter of Section Two (2),
                  Township 37 North, Range 4 East, Cleveland Township, Elkhart
                  County, Indiana, and more particularly described as follows:

                  Commencing at the Southeast corner of said quarter section;
                  thence due North along the east line of said quarter section
                  one thousand two hundred ninety-three and forty-five
                  hundredths (1293.45) feet to the south right-of-way of the
                  Penn Central Railroad; thence south eighty-nine (89) degrees
                  fifty-nine (59) minutes west along the south right-of-way line
                  of said railroad three hundred sixty-five (365) feet to the
                  point of beginning of this description; thence continuing
                  south, eighty-nine (89) degrees forty-nine (49) minutes along
                  the south line of said railroad three hundred twenty-five
                  (325) feet; thence due south four hundred thirty-eight (438)
                  feet to the north right-of-way line of a 60-


                                       1
<PAGE>

                  foot road; thence north eighty-nine (89) degrees fifty-nine
                  (59) minutes east along the north line of said road three
                  hundred twenty-five (325) feet; thence due north four hundred
                  thirty-eight (438)feet to the point of beginning.

                  2. TERM: The term of this Lease shall be for three years, from
the 1st of September, 2000, through the 31st day of August, 2003.

                  3. RENTAL: Lessee agrees to pay to Lessor in advance of the
first day of each month throughout the term of this lease, a rental of Eight
Thousand Eight Hundred and Eighty ($8,880.00) Dollars per month (40,381 sq ft
including 1,056 sq ft of office, at .22 sq ft rounded off.). Lessee further
agrees to pay all insurance premiums for fire, extended coverage and hazard
insurance on the leased premises in amounts provided for in this agreement.
Lessee additionally, agrees to pay, Real Estate Taxes assessed after the 1999
tax year, payable in 2000, as provided in this Agreement.

                  4. CONDITION. USE AND CARE OF LEASED PREMISES: Lessee hereby
accepts the leased premises in its present condition. Lessee agrees to use said
premises for its warehousing and display, sales, repair and modification of its
products, and for all additional uses and purposes as may be customarily
incidental to the operation of Lessee's business.

                  Lessee agrees that in no event shall it conduct any business
on said premises which would be in violation of any local, state, or federal
rules, regulations, ordinances, or statutes.

                  Lessee agrees that it shall place no sign upon leased premises
until Lessor shall first have approved, in writing, the size and location of
said sign.

                  Lessee agrees to maintain the leased premises in good
condition at all times, subject only to reasonable wear and tear of the kind
normally accounted for by depreciation; and Lessee agrees to maintain the

                                       2

<PAGE>

leased premises in a neat and presentable condition at all times and not to
permit accumulations of any unsightly deposits of rubbish or other matter.

                  Lessor reserves the right to make an inspection of the leased
premises at reasonable times during business hours no oftener than once every
three (3) months; provided, however, that said inspection shall not in any way
interrupt Lessee's normal business operations.

                  Lessee shall have the right to make such interior changes,
improvements, and alterations to the leased premises, at its own cost and
expense, as may be desired or necessary to adapt the leased premises to the
business to be carried out by the Lessee; provided, however, that no structural
change shall be made in such leased premises without prior written consent of
the Lessor, and Lessee will not allow any liens or encumbrances to attach to the
premises for any such changes, improvements, and/or alterations, and will hold
the Lessor harmless for any such liens and encumbrances that may arise
therefrom. Any changes, alterations, and/or additions made by the Lessee in the
leased premises shall be and become a part of such premises and remain thereon
the property of the Lessor; but if such alterations, changes or additions, or
any of them, are removable without injury to the premises, then the same may be
removed at the option of the Lessee.

                  5. EFFECT OF DESTRUCTION OF THE LEASED PREMISES; If the leased
premises should be wholly or substantially destroyed without any fault on the
part of the Lessee, then an equitable adjustment of the rental due hereunder
shall be made with respect to the length of time between the date of the
destruction and the date when the premises are restored, said adjustment to be
made upon a prorata basis. If Lessor elects not to restore the destroyed
premises or if such restoration is not completed within four (4) months from the
date of such destruction, then this lease shall terminate as of said date of
destruction.

                                       3

<PAGE>

                  6. TAXES AND UTILITIES: Lessor agrees to pay all real estate
taxes levied with respect to the leased premises at the rate of taxes assessed
for the 1999 taxes payable in 2000 subject to other paragraphs of this
agreement.

                  Lessee agrees to pay, in equal monthly installments, any
increase in real estate taxes levied, with respect to the leased premises,
subsequent to the 1999 tax year.

                  Lessee agrees to pay, all taxes levied with respect to all
property of Lessee situated on the leased premises.

                  Lessee agrees to pay the installation costs of all current
charges for all utilities used by Lessee on the leased premises, excepting
water.

                  7. LESSOR'S RESPONSIBILITY FOR REPAIR OF LEASED PREMISES; The
Lessor shall be responsible, at its expense, to keep in repair the warehouse
flooring, heating and air conditioning equipment, and the exterior of said
leased premises, including the roof, exterior walls, footings, foundations,
parking areas, and access roads. The Lessee, however, shall have the
responsibility of notifying the Lessor immediately when any repairs are required
hereunder, before the Lessor shall be held responsible for the repair. The
Lessee, however, shall be responsible for maintenance or repairs of a minor
nature which result from ordinary wear and tear of the leased premises, as well
as the utilities contained therein, or result from the acts of the Lessee, its
agents, employees, or invitees.

                  8. ASSIGNMENT OR SUBLETTING; Lessee may assign or sublet all
or any portion of the leased premises; provided, however, that nothing in this
paragraph shall be construed as relieving Lessee from any responsibility it may
have under this lease for nonpayment of rent or any other responsibility, and
provided further, that

                                       4


<PAGE>

Lessee shall remain primarily liable on said lease in the event of any
assignment or subletting.

                  9. HOLD HARMLESS, INSURANCE, AND SUBROGATION: Lessee agrees to
maintain in full force and effect at all times public liability insurance with
bodily injury limits of at least $500,000 per person, $1,000,000 aggregate, and
property damage limits in amounts of at least $500,000 with an insurance carrier
acceptable to Lessor duly protecting Lessor and shall provide Lessor. Lessee
also agrees to keep the real property, including all fixtures, adequately
insured against fire and other casualty; Lessee agrees to keep all personal
property adequately insured against fire and other casualty. Lessee shall
deliver to Lessor evidence of the existence of such liability insurance.


                  Lessee agrees to hold Lessor free and harmless from any and
all liability to which Lessor might otherwise be subjected by reason of Lessee's
activities on leased premises, including, among other things, reimbursing Lessor
for all costs, attorney's fees, etc., that may be incurred by Lessor in
defending against any such claimed liability except that neither Lessor or
Lessee shall be liable to the other for damage or loss to property growing out
of or in connection with Lessee's use and occupancy of the leased premises or to
the contents caused by the negligence or fault of Lessor or Lessee or of their
respective agents, employees, subtenants, assignees, or invitees, to the extent
such damage or loss is covered by the fire and other casualty insurance
maintained by the parties. Lessor and Lessee agree to notify their respective
insurance companies, in writing, of the provisions of this paragraph, and in the
event either party cannot waive its subrogation rights pursuant to this
paragraph, such parties shall immediately notify the other party of this fact in
writing.

                  Lessor shall be entitled at all times to post on the leased
premises appropriate notices of non-responsibility with respect to any


<PAGE>

work by Lessee which might otherwise subject the leased premises to mechanic's
lien claims.

                  10. RIGHTS OF LESSOR ON RECEIVERSHIP OR BANKRUPTCY OF ANY
LESSEE: At the option of Lessor, this lease shall terminate and Lessor shall
forthwith be entitled to the possession of the leased premises upon the
occurrence of any of the following events:

                           (a) The execution by any Lessee of an assignment for
                  the benefit of creditors.

                           (b) The appointment by any court of competent
                  jurisdiction of a receiver or other similar officer to
                  administer the assets of any Lessee.

                           (c) The filing of a petition in bankruptcy by or
                  against any Lessee.

                           (d) The filing of a petition for any arrangement or
                  any other similar proceeding under any provision of the
                  Federal Bankruptcy Act, as amended, with respect to any
                  Lessee.

                  This option shall be exercised, if at all, by Lessor mailing
postage prepaid, a written notice to Lessee at the leased premises or to the
assignee, trustee, etc., as the case may be, at his place of business, advising
of Lessor's election to so terminate this lease as of the date of the occurrence
of such event. Such written notice must be mailed within ninety (90) days after
Lessor receives actual notice of the occurrence of such event. Lessee, when used
in this paragraph, shall mean any one or more of several persons embraced within
the term Lessee under this lease.

                  11. RIGHTS OF LESSOR UPON DEFAULT BY LESSEE: If at any time
Lessee defaults, under this lease, by failing to fully observe and perform all
conditions and promises to be observed and performed by Lessee hereunder or
defaults in any other manner, and such default is not cured within ten (10) days
(except default in payment of rent

                                       6

<PAGE>

for which the period is three (3) days) after the delivery in person to Lessee
by or on behalf of Lessor or the mailing to Lessee, by or on behalf of Lessor,
postage prepaid, addressed to Lessee at the leased premises of a written notice
of such default and a demand that the default be cured, then at any time
thereafter Lessor may pursue any one or more of the following remedies (such
remedies being cumulative and not mutually exclusive):

                           (a) Lessor may immediately recover from Lessee all
                  amounts due to Lessor hereunder, together with damages arising
                  from Lessee's default.

                           (b) Lessor shall forthwith be entitled to the
                  possession of the leased premises without thereby in any way
                  relieving Lessee of Lessee's obligation to pay rent hereunder.
                  If pursuant hereto, Lessor should repossess the leased
                  premises, Lessor may, at its option, re-let the leased
                  premises for the benefit of Lessee, in which case Lessee
                  agrees to pay all costs of re-letting, pay monthly, the excess
                  of the monthly rental provided for hereunder over the monthly
                  rental received from such re-letting with Lessor being
                  entitled to retain the excess, if any, of the monthly rental
                  received from such re-letting over the monthly rental provided
                  for hereunder. Neither repossession by Lessor hereunder nor
                  re-letting by Lessor hereunder shall in any way take away
                  Lessor's right to thereafter terminate this lease as provided
                  for in the following subparagraph (c).

                           (c) Lessor may terminate this lease by delivering to
                  Lessee in person or by mailing, postage prepaid, to Lessee at
                  the leased premises, a writing stating Lessor's election to
                  terminate this lease.

                  If Lessor should thus terminate this lease, then Lessor may
forthwith recover, from Lessee the excess of rentals provided for

                                       7

hereunder above the then reasonable rental value of the remainder of the term of
this lease.

                  Lessee agrees that if Lessor pursues any of the foregoing
remedies, Lessee will pay to Lessor all expenses and attorney's fees reasonably
incurred by Lessor in connection therewith and that in any litigation the same
shall be provided for as incidental damages.

                  12. Lessee agrees that this lease and Lessee's rights
hereunder shall at all times during the term hereof be subject and subordinate
to the lien of any mortgage, deed of trust, or other encumbrance which presently
exists with respect to the leased premises or which may be placed upon the
leased premises hereafter by Lessor or Lessor's successor in interest and Lessee
agrees to execute and deliver to Lessor or Lessor's successor in interest any
instrument or instruments requested by Lessor with respect to any such
encumbrance placed or to be placed upon the leased premises and subordinating
this lease thereto.

                  13. OPTION TO RENEW: At the expiration of the term of the
Lease, Lessee shall have the option to renew the Lease for an additional
thirty-six (36) months, commencing September 1, 2003 and ending August 31, 2006.
All provisions of the Lease for the renewal term, excepting that basic rent for
the renewal term shall be renegotiated by and between the parties prior to the
commencement of said renewal term. Notice of exercise of said option to renew
shall be given by the Lessee to the Lessor no less than sixty (60) days prior to
the termination of this lease term.

                  This agreement constitutes the entire agreement by and between
the parties and may only be altered, amended, or changed in writing.

                                       8

<PAGE>


                  IN WITNESS WHEREOF, the parties have hereunto executed this
agreement on the day first above written.

                           LESSOR:

                           MERVIN D. LUNG BUILDING COMPANY, INC.



                           By:  /S/ Mervin D. Lung
                                ----------------------------------
                                    Mervin D. Lung, President




                           LESSEE:

                           PATRICK INDUSTRIES, INC.




                           By: /S/ Keith V. Kankel
                               -------------------
                                    KEITH V. KANKEL, VICE-PRESIDENT


Attest:

/S/ Sherry L. Kizer
- -------------------

DATED:                     August 17, 2000


                                       9
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(Q)
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>COMMERCIAL LEASE DATED NOVEMBER 1, 2000
<TEXT>





                                COMMERCIAL LEASE
                                ----------------

                  THIS AGREEMENT, made and entered into this First day of
November 2000, between MERVIN D. LUNG BUILDING COMPANY, INC., an Indiana
Corporation, of St. Joseph County, State of Indiana, hereinafter know as
"LESSOR", and PATRICK INDUSTRIES, INC., an Indiana Corporation with principal
offices in Elkhart County, Indiana, hereinafter referred to as "LESSEE", for and
in consideration of the covenants and agreements hereinafter mentioned, that
real estate located in Elkhart County, State of Indiana, and more particularly
described in ITEM 1. LEASED PREMISES.

                  WHEREAS, LESSOR is owner of certain property situated in
Elkhart, Indiana; and

                  WHEREAS, LESSEE is desirous of leasing said property.

                  NOW, THEREFORE, in consideration of the mutual promises
hereinafter contained with applicable ordinances, laws and regulations, the
parties agree as follows:

                  1. LEASED PREMISES: the LESSOR hereby leases to LESSEE those
premises bearing the street address of 2200 West Lusher Avenue, Elkhart,
Indiana, more particularly described as follows:


                  The West Two Hundred (200) feet of the following described
                  tract:

                  A part of the East half of Sections 12 and 13, Township 37
                  North, Range 4 East, more particularly described as follows:

                  Assuming the west right-of-way line of Nappanee Street between
                  Lusher Avenue and the underpass under the Penn-Central
                  Railroad, as said right-of-way line is established by Indiana
                  State Highway concrete right-of-way monuments, to have a
                  bearing of north zero (0) degrees 14 minutes west; beginning
                  at an iron stake on the said west right-of-way line of
                  Nappanee Street at a point that is 60 feet southerly (measured
                  at right angles) from the gauge of the southerly rail of the
                  most southerly existing sidetrack of the Penn-Central
                  Railroad; thence south zero (0) degrees 14 minutes east along
                  the said west right-of-way line of Nappanee Street, 490.17
                  feet to a spike that is north zero (0) degrees


                                       1
<PAGE>

                  14 minutes west of a spike found on the south edge of an
                  18-foot asphalt pavement; thence south 89 degrees 46 minutes
                  west, 60 feet to an iron stake at a point of curvature; thence
                  southwesterly along a curve, bearing left with a radius of
                  269.22 feet a distance of 171.51 feet to an iron stake at a
                  point of tangent of said curve; thence south 53 degrees 16
                  minutes west, 92.86 feet to an iron stake at a point of
                  curvature; thence southwesterly along a curve bearing right
                  with a radius of 289.99 feet, a distance of 185.92 feet to an
                  iron stake at the point of tangent of said curve; thence due
                  west parallel with and 30 feet north of the north line of an
                  0.85 acre tract of land conveyed by the New York Central
                  Railroad Company to Albert Davidson, (et al Elkhart County
                  Deed Record 287, page 242), 445.56 feet to an iron stake;
                  thence north zero(0) degrees 14 minutes west, 394.75 feet to
                  an iron stake; thence north 73 degrees 59 minutes east
                  parallel with and 60 feet southerly (measured at right angles)
                  from the gauge of the southerly rail of the most southerly
                  existing side-track of the Penn-Central Railroad, 945.97 feet
                  to the place of beginning, containing 10 acres, more or less,
                  together with the buildings and structures erected thereon.

                  2. TERM: The term of this Lease shall be for three years, from
the 1st of November, 2000, through the 31st day of October, 2003.

                  3. RENTAL: Lessee agrees to pay to Lessor in advance of the
first day of each month throughout the term of this lease, a rental of Six
Thousand Eight Hundred and Fifty ($6,850.00) Dollars per month (31,152 sq ft at
 .22 sq ft rounded off.). Lessee further agrees that if its operations hereunder
and use of said property cause an increase in the cost of fire and extended
coverage insurance on any building, which in whole or in part is included in the
leased premises, over and above the cost that would otherwise be applicable to
said building, then the monthly rent provided for hereinabove will be increased
by the amount of the increase in the cost of such insurance by the amount of the
increase in the cost of such insurance on a monthly basis. Lessee additionally,
agrees to pay, Real Estate Taxes assessed after the 1999 tax year, payable in
2000, as provided in this Agreement.

                  4. CONDITION. USE AND CARE OF LEASED PREMISES: Lessee hereby
accepts the leased premises in its present condition. Lessee agrees to use said
premises for its warehousing and

                                       2


display, sales, repair and modification of its products, and for all additional
uses and purposes as may be customarily incidental to the operation of Lessee's
business.

                  Lessee agrees that in no event shall it conduct any business
on said premises which would be in violation of any local, state, or federal
rules, regulations, ordinances, or statutes. Lessee agrees that it shall place
no sign upon leased premises until Lessor shall first have approved, in writing,
the size and location of said sign.

                  Lessee agrees to maintain the leased premises in good
condition at all times, subject only to reasonable wear and tear of the kind
normally accounted for by depreciation; and Lessee agrees to maintain the leased
premises in a neat and presentable condition at all times and not to permit
accumulations of any unsightly deposits of rubbish or other matter.


                  Lessor reserves the right to make an inspection of the leased
premises at reasonable times during business hours no oftener than once every
three (3) months; provided, however, that said inspection shall not in any way
interrupt Lessee's normal business operations.

                  Lessee shall have the right to make such interior changes,
improvements, and alterations to the leased premises, at its own cost and
expense, as may be desired or necessary to adapt the leased premises to the
business to be carried out by the Lessee; provided, however, that no structural
change shall be made in such leased premises without prior written consent of
the Lessor, and Lessee will not allow any liens or encumbrances to attach to the
premises for any such changes, improvements, and/or alterations, and will hold
the Lessor harmless for any such liens and encumbrances that may arise
therefrom. Any changes, alterations, and/or additions made by the Lessee in the
leased premises shall be and become a part of such premises and remain thereon
the property of the Lessor; but if such alterations, changes or additions, or
any

                                       3
<PAGE>

of them, are removable without injury to the premises, then the same may be
removed at the option of the Lessee.

                  5. EFFECT OF DESTRUCTION OF THE LEASED PREMISES; If the leased
premises should be wholly or substantially destroyed without any fault on the
part of the Lessee, then an equitable adjustment of the rental due hereunder
shall be made with respect to the length of time between the date of the
destruction and the date when the premises are restored, said adjustment to be
made upon a prorata basis. If Lessor elects not to restore the destroyed
premises or if such restoration is not completed within four (4) months from the
date of such destruction, then this lease shall terminate as of said date of
destruction.

                  6. TAXES AND UTILITIES: Lessor agrees to pay all real estate
taxes levied with respect to the leased premises at the rate of taxes assessed
for the 1999 taxes payable in 2000 subject to other paragraphs of this
agreement.

                  Lessee agrees to pay, in equal monthly installments, any
increase in real estate taxes levied, with respect to the leased premises,
subsequent to the 1999 tax year. The first monthly installment of the annual
amount of increased taxes shall be paid on the 1st day of the month following
the notice of increase in taxes made by Lessor to Lessee upon receipt of the
same by Lessor.

                  Lessee agrees to pay, all taxes levied with respect to all
property of Lessee situated on the leased premises.

                  Lessee agrees to pay the installation costs of all current
charges for all utilities used by Lessee on the leased premises, excepting
water.

                  7. LESSOR'S RESPONSIBILITY FOR REPAIR OF LEASED PREMISES; The
Lessor shall be responsible, at its expense, to keep in repair the warehouse
flooring, heating and air conditioning equipment, and the exterior of said
leased premises, including the roof,

                                       4

<PAGE>

exterior walls, footings, foundations, parking areas, and access roads. The
Lessee, however, shall have the responsibility of notifying the Lessor
immediately when any repairs are required hereunder, before the Lessor shall be
held responsible for the repair. The Lessee, however, shall be responsible for
maintenance or repairs of a minor nature which result from ordinary wear and
tear of the leased premises, as well as the utilities contained therein, or
result from the acts of the Lessee, its agents, employees, or invitees.

                  8. ASSIGNMENT OR SUBLETTING; Lessee may assign or sublet all
or any portion of the leased premises; provided, however, that nothing in this
paragraph shall be construed as relieving Lessee from any responsibility it may
have under this lease for nonpayment of rent or any other responsibility, and
provided further, that Lessee shall remain primarily liable on said lease in the
event of any assignment or subletting.

                  9. HOLD HARMLESS, INSURANCE, AND SUBROGATION: Lessee agrees to
maintain in full force and effect at all times public liability insurance with
bodily injury limits of at least $500,000 per person, $1,000,000 aggregate, and
property damage limits in amounts of at least $500,000 with an insurance carrier
acceptable to Lessor duly protecting Lessor. Lessee also agrees to keep the real
property, including all fixtures, adequately insured against fire and other
casualty;

Lessee agrees to keep all personal property adequately insured against fire and
other casualty. Lessee shall deliver to Lessor evidence of the existence of such
liability insurance. Lessee agrees to hold Lessor free and harmless from any and
all liability to which Lessor might otherwise be subjected by reason of Lessee's
activities on leased premises, including, among other things, reimbursing Lessor
for all costs, attorney's fees, etc., that may be incurred by Lessor in
defending against any such claimed liability except that

                                       5
<PAGE>

 neither Lessor or Lessee shall be liable to
the other for damage or loss to property growing out of or in connection with
Lessee's use and occupancy of the leased premises or to the contents caused by
the negligence or fault of Lessor or Lessee or of their respective agents,
employees, subtenants, assignees, or invitees, to the extent such damage or loss
is covered by the fire and other casualty insurance maintained by the parties.
Lessor and Lessee agree to notify their respective insurance companies, in
writing, of the provisions of this paragraph, and in the event either party
cannot waive its subrogation rights pursuant to this paragraph, such parties
shall immediately notify the other party of this fact in writing.

                  Lessor shall be entitled at all times to post on the leased
premises appropriate notices of non-responsibility with respect to any work by
Lessee which might otherwise subject the leased premises to mechanic's lien
claims.

                  10. RIGHTS OF LESSOR ON RECEIVERSHIP OR BANKRUPTCY OF ANY
LESSEE: At the option of Lessor, this lease shall terminate and Lessor shall
forthwith be entitled to the possession of the leased premises upon the
occurrence of any of the following events:

                           (a) The execution by any Lessee of an assignment for
                  the benefit of creditors.

                           (b) The appointment by any court of competent
                  jurisdiction of a receiver or other similar officer to
                  administer the assets of any Lessee.

                           (c) The filing of a petition in bankruptcy by or
                  against any Lessee.

                           (d) The filing of a petition for any arrangement or
                  any other similar proceeding under any provision of the
                  Federal Bankruptcy Act, as amended, with respect to any
                  Lessee.


                                       6

<PAGE>

                  This option shall be exercised, if at all, by Lessor mailing
postage prepaid, a written notice to Lessee at the leased premises or to the
assignee, trustee, etc., as the case may be, at his place of business, advising
of Lessor's election to so terminate this lease as of the date of the occurrence
of such event. Such written notice must be mailed within ninety (90) days after
Lessor receives actual notice of the occurrence of such event. Lessee, when used
in this paragraph, shall mean any one or more of several persons embraced within
the term Lessee under this lease.

                  11. RIGHTS OF LESSOR UPON DEFAULT BY LESSEE: If at any time
Lessee defaults, under this lease, by failing to fully observe and perform all
conditions and promises to be observed and performed by Lessee hereunder or
defaults in any other manner, and such default is not cured within ten (10) days
(except default in payment of rent for which the period is three (3) days) after
the delivery in person to Lessee by or on behalf of Lessor or the mailing to
Lessee, by or on behalf of Lessor, postage prepaid, addressed to Lessee at the
leased premises of a written notice of such default and a demand that the
default be cured, then at any time thereafter Lessor may pursue any one or more
of the following remedies (such remedies being cumulative and not mutually
exclusive):

                           (a) Lessor may immediately recover from Lessee all
                  amounts due to Lessor hereunder, together with damages arising
                  from Lessee's default.

                           (b) Lessor shall forthwith be entitled to the
                  possession of the leased premises without thereby in any way
                  relieving Lessee of Lessee's obligation to pay rent hereunder.
                  If pursuant hereto, Lessor should repossess the leased
                  premises, Lessor may, at its option, re-let the leased
                  premises for the benefit of Lessee, in which case Lessee
                  agrees to pay all costs of re-letting, pay monthly, the excess
                  of the monthly rental provided for hereunder over the

                                       7

<PAGE>

                  monthly rental received from such re-letting with Lessor being
                  entitled to retain the excess, if any, of the monthly rental
                  received from such re-letting over the monthly rental provided
                  for hereunder. Neither repossession by Lessor hereunder nor
                  re-letting by Lessor hereunder shall in any way take away
                  Lessor's right to thereafter terminate this lease as provided
                  for in the following subparagraph (c).

                           (c) Lessor may terminate this lease by delivering to
                  Lessee in person or by mailing, postage prepaid, to Lessee at
                  the leased premises, a writing stating Lessor's election to
                  terminate this lease.

                  If Lessor should thus terminate this lease, then Lessor may
forthwith recover, from Lessee the excess of rentals provided for hereunder
above the then reasonable rental value of the remainder of the term of this
lease.

                  Lessee agrees that if Lessor pursues any of the foregoing
remedies, Lessee will pay to Lessor all expenses and attorney's fees reasonably
incurred by Lessor in connection therewith and that in any litigation the same
shall be provided for as incidental damages.

                  12. Lessee agrees that this lease and Lessee's rights
hereunder shall at all times during the term hereof be subject and subordinate
to the lien of any mortgage, deed of trust, or other encumbrance which presently
exists with respect to the leased premises or which may be placed upon the
leased premises hereafter by Lessor or Lessor's successor in interest and Lessee
agrees to execute and deliver to Lessor or Lessor's successor in interest any
instrument or instruments requested by Lessor with respect to any such
encumbrance placed or to be placed upon the leased premises and subordinating
this lease thereto.

                  13. OPTION TO RENEW: If Lessee is not in default, it is
granted an option to renew and extend the term of this lease for an

                                       8

<PAGE>

additional period of three (3) years, on terms and conditions to be negotiated
by Lessor and Lessee at the time the option is exercised. Said option shall be
exercised by Lessee providing Lessor written notice no less than sixty (60) days
prior to the termination of his lease term. This agreement constitutes the
entire agreement by and between the parties and may only be altered, amended, or
changed in writing.

                                       9
<PAGE>


                  IN WITNESS WHEREOF, the parties have hereunto executed this
agreement on the day first above written.

                           LESSOR:
                           MERVIN D. LUNG BUILDING COMPANY, INC.



                           By:  /S/ Mervin D. Lung
                                ----------------------------------
                                    Mervin D. Lung, President




                           LESSEE:

                           PATRICK INDUSTRIES, INC.




                           By: /S/ Keith V. Kankel
                               -------------------
                                    KEITH V. KANKEL, VICE-PRESIDENT


Attest:

/S/ Sherry L. Kizer
- -------------------


DATED:                     November 17, 2000


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(R)
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>CREDIT AGREEMENT DATED NOVEMBER 1, 2000
<TEXT>




                       FIRST AMENDMENT TO CREDIT AGREEMENT
                       -----------------------------------

         THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of January 28, 2000
(this "Amendment"), is between PATRICK INDUSTRIES, INC., an Indiana corporation
(the "Company"), and BANK ONE, INDIANA, N.A., a national banking association,
formerly known as NBD Bank (the "Bank").


                                    RECITALS
                                    --------

         A. The Company and the Bank are parties to a Credit Agreement dated as
of February 2, 1997 (as now and hereafter amended, the "Credit Agreement")
pursuant to which the Bank agreed, subject to the terms and conditions thereof,
to extend credit to the Company in a revolving credit facility in the amount of
$10,000,000.

         B. The parties now desire to renew the revolving credit facility and to
amend certain terms and provisions of the Credit Agreement as set forth herein.


                                      TERMS
                                      -----

         In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:


ARTICLE I. AMENDMENTS. Effective upon the date that the conditions set forth in
Article III of this Amendment are satisfied (the "Amendment Date"), which date
shall be determined by the Bank in its sole discretion, the Credit Agreement
shall be amended as follows:

         1.1 The definitions of the terms "Bonds" and "Revolving Credit
Termination Date" in Section 1.1 are amended and restated in their entirety as
follows:

                           "Bonds" shall mean (i) the Five Million Dollars
                  ($5,000,000) principal amount The Stanly County Industrial
                  Facilities and Pollution Control Financing Authority Variable
                  Rate Demand Industrial Development Revenue Bonds (Patrick
                  Industries, Inc. Project), Series 1998, (ii) the Six Million
                  Dollars ($6,000,000) principal amount State of Oregon Economic
                  Development Revenue Bonds, Series CLI (Patrick Industries,
                  Inc. Project), dated December 22, 1994, (iii) the Three
                  Million Nine Hundred Thousand Dollars ($3,900,000) principal
                  amount The Indiana Development Finance Authority Limited
                  Obligation Refunding Revenue Bonds (Patrick Industries, Inc.
                  Project), Series 1991, and (iv) all other obligations of the
                  Company or any of its Subsidiaries to the Bank under or in
                  connection with any future bond issuance for the benefit of
                  the Company or any of its Subsidiaries.

                           "Revolving Credit Termination Date" shall mean the
                  earlier to occur of (a) January 28, 2003 and (b) the date on
                  which the Commitment shall be terminated pursuant to Section
                  2.2 or Section 6.2.

         1.2      The following definition of the term "Amendment Fee" is added
to Section 1.1 in alphabetical order:

                           "Amendment Fee" shall mean the fee payable in
                  connection with the First Amendment to Credit Agreement, dated
                  as of January 28, 2000

                                       1

<PAGE>

                  (the "First Amendment") on the Amendment Date as defined in
                  the First Amendment in the amount of $12,500.

         1.3 Section 5.2(c) shall be amended and restated as follows:

                           (c) Tangible Net Worth. Permit or suffer the
                  consolidated Tangible Net Worth of the Company and its
                  Subsidiaries to be less than $57,000,000 at any time, which
                  amount shall be increased by an amount equal to (i) 50% of the
                  Cumulative Net Income of the Company and its Subsidiaries on
                  and after December 31, 1999, and (ii) 100% of the net cash
                  proceeds of any stock issuance by the Company after the
                  Effective Date.

         1.4 The following subsection (c) is added to the end of Section 2.3 as
follows:

                           (c) In addition to the commitment fees payable
                  pursuant to Section 2.3(a) and the facility fee payable
                  pursuant to Section 2.3(b), the Company agrees to pay to the
                  Bank on the Amendment Date an Amendment Fee of $12,500.

         1.5 Exhibit A annexed to the Credit Agreement is deleted in its
entirety and Exhibit A annexed to this Amendment shall be deemed substituted in
place thereof. The Company shall execute and deliver to the Bank a replacement
revolving credit note in the form of Exhibit A annexed to this Amendment (the
"Replacement Revolving Credit Note") to be exchanged for the existing Revolving
Credit Note issued by the Company to the Bank under the Credit Agreement (the
"Existing Revolving Credit Note"). On the Amendment Date, the principal balance
of the Exiting Revolving Credit Note, as well as all other information which has
been endorsed on the schedule attached to the Existing Revolving Credit Note or
elsewhere on the books and records of the Bank with respect to the Existing
Revolving Credit Note, shall be endorsed on the schedule attached to the
Replacement Revolving Credit Note or elsewhere on the books and records of the
Bank with respect to the Replacement Revolving Credit Note. The execution and
delivery by the Company of the Replacement Revolving Credit Note shall not in
any circumstances be deemed a novation or to have terminated, extinguished or
discharged the Company's indebtedness evidenced by the Existing Revolving Credit
Note, all of which indebtedness shall continue under and be evidenced and
governed by the Replacement Revolving Credit Note and the Credit Agreement, as
amended, and subject to Article III of this Amendment, the Bank shall be
entitled to all of the benefits of the security documents with respect to the
entire indebtedness evidenced by the Replacement Revolving Credit Note.

         1.6 Each reference in the Credit Agreement, the Note and all related
documents, instruments and agreements to "NBD Bank" shall be deleted and "Bank
One, Indiana, N.A." shall be substituted in place thereof.

         1.7 Schedules 4.4, 4.5, 4.13, 5.2(e) and 5.2(f) annexed to the Credit
Agreement are deleted in their entirety and Schedules 4.4, 4.5, 4.13, 5.2(e) and
5.2(f) annexed to this Amendment shall be deemed substituted in place thereof.


ARTICLE II. REPRESENTATIONS. The Company represents and warrants to the Bank
that:

         2.1 The execution, delivery and performance of this Amendment are
within its powers, have been duly authorized and are not in contravention with
any law, of the terms of its Articles of Incorporation or By-laws, or any
material undertaking to which it is a party or by which it is bound.

                                       2

<PAGE>

         2.2 This Amendment is the legal, valid and binding obligation of the
Company enforceable against it in accordance with the respective terms hereof.

         2.3 After giving effect to the amendments herein contained, the
representations and warranties contained in Article IV of the Credit Agreement
are true on and as of the date hereof with the same force and effect as if made
on and as of the date hereof, provided, that, the representations and warranties
contained in Section 4.6 of the Credit Agreement shall be deemed to have been
made with respect to the financial statements most recently delivered pursuant
to Section 5.1(d) of the Credit Agreement.

         2.4 No Event of Default or event or condition which, with notice or
lapse of time or both, could become such an Event of Default exists or has
occurred and is continuing on the date hereof.


ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall not become
effective until each of the following has been satisfied:

         3.1 Copies of resolutions adopted by the Board of Directors of the
Company, certified by an officer of the Company, as being true and correct and
in full force and effect without amendment as of the date hereof, authorizing
the Company to enter into this Amendment and any other documents or agreements
executed pursuant hereto, if any, shall have been delivered to the Bank.

         3.2      This Amendment shall be signed by the Company and the Bank.

         3.3 The Company shall have executed the Revolving Credit Note annexed
to this Amendment as Exhibit A.

         3.4 The Bank shall receive a favorable written opinion of Warrick &
Boyn, counsel for the Company, in a form reasonably satisfactory to the Bank.

         3.5 The Company shall have paid the Amendment Fee and the fees of
counsel to the Bank.

         3.6 The Bank shall receive such other documents and the Company shall
satisfy such other conditions and complete such other matters as the Bank may
reasonably request.


ARTICLE IV.  MISCELLANEOUS.

         4.1 References in the Credit Agreement to "this Agreement" and
references in any note, certificate, instrument or other document to the "Credit
Agreement" shall be deemed to be references to the Credit Agreement as amended
hereby and as further amended from time to time.

         4.2 The Company agrees to pay and to save the Bank harmless for the
payment of all costs and expenses arising in connection with this Amendment,
including the reasonable fees of counsel to the Bank in connection with
preparing this Amendment and the related documents.

         4.3 The Company acknowledges and agrees that the Bank has fully
performed all of its obligations under all documents executed in connection with
the Credit Agreement and all actions taken by the Bank are reasonable and
appropriate under the circumstances and within its rights under the Credit
Agreement and all other documents executed in connection therewith and otherwise
available. The Company represents and warrants that it is not aware of any
claims or causes of action against the Bank, or any of its successors or
assigns. Notwithstanding this representation and as further consideration for
the agreements and understandings herein, the Company and its heirs, successors
and assigns, hereby release the Bank and its heirs, successors and assigns from
any liability, claim, right or cause of action


                                       3

<PAGE>

which now exists, arising from or in any way related to facts in existence as of
the date hereof to any agreements or transactions between the Bank and the
Company or to any acts or omissions of the Bank in connection therewith or
otherwise.

         4.4 Except as expressly amended hereby, the Company agrees that the
Credit Agreement, the promissory note and all other documents and agreements
executed by the Company in connection with the Credit Agreement in favor of the
Bank are ratified and confirmed and shall remain in full force and effect and
that it has no set off, counterclaim or defense with respect to any of the
foregoing. Terms used but not defined herein shall have the respective meanings
ascribed thereto in the Credit Agreement.

         4.5 This Amendment shall be deemed to be a contract made under and for
all purposes shall be governed by and construed in accordance with the laws of
the State of Indiana applicable to contracts made and to be performed entirely
within such State, without regard to the choice of law principles of such State.

         4.6 This Amendment may be signed upon any number of counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.


         IN WITNESS WHEREOF, the parties signing this Amendment have caused this
Amendment to be executed and delivered as of the date first above written.

                                         PATRICK INDUSTRIES, INC.



                                         /S/Keith V. Kankel
                                         -----------------------------------
                                         By:  Keith V. Kankel
                                           Its:  Vice President - Finance



                                         BANK ONE, INDIANA N.A.



                                         /S/Donald E. Hobik
                                         -----------------------------------
                                         By:  Donald E. Hobik
                                           Its:  Vice President





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>COMPUTATION OF OPERATING RATIOS
<TEXT>


                                                                     Exhibit 12

                            PATRICK INDUSTRIES, INC.

                  Statement of Computation of Operating Ratios




Operating  ratios  which  appear  in this Form  10-K,  including  gross  profit,
warehouse and delivery expenses,  selling, general, and administrative expenses,
operating  income,  and net income  were  computed by  dividing  the  respective
amounts by net sales for the periods indicated.


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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