PATRICK INDUSTRIES INC - Quarter Report: 2025 September (Form 10-Q)

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See accompanying Notes to Condensed Consolidated Financial Statements.

PATRICK INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1.

For further information, refer to Patrick’s Audited Consolidated Financial Statements and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025.

Summary of Significant Accounting Policies

A summary of significant accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025.

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% % % %

Customer 2

% % % %

The Company had two major customers that accounted for the following trade receivables as of September 28, 2025 and December 31, 2024:

As of

September 28, 2025

December 31, 2024

Percentage of trade receivables, net:

Customer 1

Customer 2

Other expenses

During the nine months ended September 28, 2025, the Company recognized a legal settlement expense of $ million, related to a motor vehicle accident that resulted in two fatalities, within "Other expenses" in the Company's condensed consolidated statements of income.

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NOTE 2.

$ $ Marine Powersports Manufactured Housing Industrial Total$ $ $

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$ $ Marine Powersports Manufactured Housing Industrial Total$ $ $

Nine Months Ended September 28, 2025

($ in thousands)

Manufacturing

Distribution

Total

Market type:

Recreational Vehicle

Marine

Powersports

Manufactured Housing

Industrial

Total

Nine Months Ended September 29, 2024

($ in thousands)

Manufacturing

Distribution

Total

Market type:

Recreational Vehicle

Marine

Powersports

Manufactured Housing

Industrial

Total

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NOTE 3.

$ Work in process Finished goods Less: reserve for inventory excess and obsolescence()() Total manufactured goods, net Materials purchased for resale (distribution products) Less: reserve for inventory excess and obsolescence()() Total materials purchased for resale (distribution products), net Total inventories$ $

NOTE 4.

$ $ Acquisitions Adjustments to preliminary purchase price allocations

Balance at September 28, 2025

$ $ $ $ Non-compete agreements Patents Trademarks Intangible assets, gross Less: accumulated amortizationCustomer relationships()()Non-compete agreements()()Patents()()Intangible assets, net$ $

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$ $ Additions Amortization()()()Adjustments to preliminary purchase price allocations

Balance at September 28, 2025

$ $ $

NOTE 5.

acquisition in the third quarter of 2025 and acquisitions in the first nine months of 2025 (the "2025 Acquisitions"). Acquisition-related costs associated with the 2025 Acquisitions were . For the third quarter and nine months ended September 28, 2025, net sales included in the Company's condensed consolidated statements of income related to the 2025 Acquisitions were $ million and $ million, respectively, and operating income was $ million and operating losses were $ million, respectively. Assets acquired and liabilities assumed in the acquisitions were recorded on the Company's condensed consolidated balance sheet at their estimated fair values as of the respective dates of acquisition. For each acquisition, the Company completes its allocation of the purchase price to the fair value of acquired assets and liabilities within a one year measurement period.

The Company completed acquisition in the third quarter of 2024 and acquisitions in the first nine months of 2024. Acquisition-related costs associated with the acquisitions completed in the first nine months of 2024 were approximately $ million. For the third quarter and nine months ended September 29, 2024, net sales included in the Company's condensed consolidated statements of income related to the acquisitions completed in the first nine months of 2024 were $ million and $ million, respectively, and operating income was $ million and $ million, respectively.

In connection with certain acquisitions, the Company is required to pay additional cash consideration if certain financial results of the acquired businesses are achieved. The Company records a liability for the estimated fair value of the contingent consideration related to each of these acquisitions as part of the initial purchase price based on the present value of the expected future cash flows and the probability of future payments at the date of acquisition.

$ $ $ Additions Fair value adjustments() ()()Settlements()()()()Fair value at end of period$ $ $ $

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$ Other long-term liabilities Total fair value of contingent consideration$ $ Maximum amount of contingent consideration$ $

2025 Acquisitions

The Company completed acquisitions in the first nine months ended September 28, 2025. Total cash consideration for the 2025 Acquisitions was approximately $ million, plus a working capital holdback and contingent consideration over a period based on future performance in connection with two acquisitions. As the Company finalizes the fair value of the acquired assets and assumed liabilities, additional purchase price adjustments may be recorded during the measurement period. Changes to preliminary purchase accounting estimates recorded in the third quarter and nine months ended September 28, 2025 related to the 2025 Acquisitions were immaterial.

2024 Acquisitions

acquisitions in the year ended December 31, 2024, including the following previously announced acquisitions (collectively, the “2024 Acquisitions”):

Company

Segment

Description

Sportech, LLC ("Sportech")

Manufacturing

Leading designer and manufacturer of high-value, complex component solutions sold to powersports original equipment manufacturers ("OEMs"), adjacent market OEMs and the aftermarket, including integrated door systems, roofs, canopies, bumpers, windshields, fender flares and cowls, based in Elk River, Minnesota, acquired in January 2024.

ICON Direct LLC, doing business as RecPro ("RecPro")

Distribution

Leading e-commerce business and aftermarket platform specializing in creating and marketing component products, systems, and solutions for the RV and marine end markets, based in Bristol, Indiana, acquired in September 2024.

Inclusive of acquisitions not discussed above, total cash consideration for the 2024 Acquisitions was approximately $ million, plus contingent consideration over a period based on future performance in connection with certain acquisitions. Purchase price allocations and all valuation activities in connection with the 2024 Acquisitions have been finalized. Changes to preliminary purchase accounting estimates recorded in the third quarter and nine months ended September 28, 2025 related to the 2024 Acquisitions were immaterial.

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$ $ $ Working capital holdback and other, net

Contingent consideration (1)

Total consideration$ $ $ $ Assets Acquired:Trade receivables$ $ $ $ Inventories Prepaid expenses & other Property, plant & equipment Operating lease right-of-use assets Identifiable intangible assets:Customer relationships Non-compete agreements Patents and developed technology Trademarks Liabilities Assumed:Current portion of operating lease obligations ()()()Accounts payable & accrued liabilities()()()()Operating lease obligations ()()()Deferred tax liabilities () ()Total fair value of net assets acquired

Goodwill (2)

Total purchase price allocation$ $ $ $

(1)These amounts reflect the acquisition date fair value of contingent consideration based on expected future results relating to certain acquisitions.

(2)Goodwill is tax-deductible for the 2025 Acquisitions and 2024 Acquisitions, except for Sportech which is only partially tax-deductible.

years. The average estimated useful life for non-compete agreements is years. The estimated useful life for patents is years, individually ranging from to years. Trademarks have an indefinite useful life.

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million and $ million for the third quarter and nine months ended September 28, 2025, respectively, and $ million and $ million for the third quarter and nine months ended September 29, 2024, respectively. $ $ $ Net income$ $ $ $ Basic earnings per common share$ $ $ $ Diluted earnings per common share$ $ $ $

NOTE 6.

million and $ million in the third quarter and nine months ended September 28, 2025, respectively, and $ million and $ million in the third quarter and nine months ended September 29, 2024, respectively.

The Board approved various share grants under the Company’s 2009 Omnibus Incentive Plan in the nine months ended September 28, 2025 totaling shares in the aggregate at an average fair value of $ per share at grant date for a total fair value at grant date of $ million.

Stock Appreciation Rights ("SARs"):

On February 25, 2025, the Board approved the grant of SARs divided into tranches at exercise prices of $, $, $ and $ per share. The SARs vest pro-ratably over from the grant date and have contractual terms. The SARs are to be settled in shares of common stock or, at the sole discretion of the Board, in cash. As of September 28, 2025, the total remaining cost to be expensed over the vesting period will be $ million which will be expensed ratably over the vesting period.

Stock Options:

On February 25, 2025, the Board approved the grant of stock options at an exercise price per share of $. The stock options vest pro-rata over from the grant date and have contractual terms. As of

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million which will be expensed ratably over the vesting period.

The Company estimates the fair value of the stock options and SARs awards as of the grant date by applying the Black-Scholes option-pricing model.

yearsExpected volatility %Risk-free interest rate %Dividend yield %

NOTE 7.

$ $ $

Denominator: (1)

Weighted average common shares outstanding - basicWeighted average impact of potentially dilutive convertible notesWeighted average impact of potentially dilutive warrants Weighted average impact of potentially dilutive securitiesWeighted average common shares outstanding - diluted

Earnings per common share: (1)

Basic earnings per common share$ $ $ $ Diluted earnings per common share$ $ $ $

(1)The prior year periods reflect the impact of the three-for-two stock split paid in December 2024. See Note 1 "Basis of Presentation and Significant Accounting Policies" for further details.

An immaterial amount of securities were not included in the computation of diluted earnings per common share as they are considered anti-dilutive for the periods presented.

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NOTE 8.

$ Revolver due 2029

% convertible notes due 2028

% senior notes due 2029

% senior notes due 2032

Total debt Less: convertible notes deferred financing costs, net()()Less: term loan deferred financing costs, net()()Less: senior notes deferred financing costs, net()()Less: current maturities of long-term debt()()Total long-term debt, less current maturities, net$ $

As of September 28, 2025, the Company maintained a senior secured credit facility comprised of a $ million revolving credit facility (the "Revolver due 2029") and a $ million term loan (the "Term Loan due 2029") and together with the Revolver due 2029, (the "2024 Credit Facility").

The interest rate for incremental borrowings under the Revolver due 2029 as of September 28, 2025 was the Secured Overnight Financing Rate (“SOFR”) plus % (or %) for the SOFR-based option. The fee payable on committed but unused portions of the Revolver due 2029 was % as of September 28, 2025.

Total cash interest paid was $ million and $ million for the third quarter and nine months ended September 28, 2025, respectively, and $ million and $ million for the third quarter and nine months ended September 29, 2024, respectively.

Conditional Conversion Feature of the % Convertible Senior Notes due 2028

As of September 28, 2025, the conditional conversion feature of the % Convertible Senior Notes due 2028 (the “% Convertible Notes”) related to the price of our common stock equaling or exceeding % of the conversion price was triggered. As a result, the % Convertible Notes are convertible, in whole or in part, at the option of the holders from October 1, 2025 to December 31, 2025. Whether the % Convertible Notes will be convertible in subsequent periods will depend on the continued satisfaction of this condition or another conversion condition in the future. The % Convertible Notes were also convertible in each calendar quarter beginning with the quarter ended December 31, 2024 based on satisfying this condition in the respective prior calendar quarter. The % Convertible Notes converted during the period from January 1, 2025 to September 30, 2025 were immaterial. The Company has the intent and ability to utilize available borrowing capacity under the Revolver due 2029 to satisfy any cash conversion obligations that it may have, should holders choose to exercise their conversion rights during the period noted above.

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NOTE 9.

% convertible notes due 2028 (1)$ $ $ $ $ $

% senior notes due 2029 (1)

$ $ $ $ $ $

% senior notes due 2032 (1)

$ $ $ $ $ $

Term loan due 2029 (1) (2)

$ $ $ $ $ $

Revolver due 2029 (1) (2)

$ $ $ $ $ $

Contingent consideration (3)

$ $ $ $ $ $

(1)The amounts of these notes listed above are the fair values for disclosure purposes only, and they are recorded in the Company's condensed consolidated balance sheets as of September 28, 2025 and December 31, 2024 at carrying value.

(2)The carrying amounts of our term loan and revolving credit facility approximate fair value as of September 28, 2025 and December 31, 2024 based upon their terms and conditions in comparison to the terms and conditions of debt instruments with similar terms and conditions available at those dates.

(3)The estimated fair value of the Company's contingent consideration is discussed further in Note 5 "Acquisitions".

NOTE 10.

% and %, respectively, and the effective tax rate for the comparable nine month periods was % and %, respectively. The first nine months of 2025 and 2024 tax rates include the impact of the recognition of excess tax benefits on share-based compensation that was recorded as a reduction to income tax expense in the amount of $ million and $ million, respectively.

Cash paid for income taxes, net of refunds, was $ million and $ million in the third quarter and first nine months of 2025, respectively, and $ million and $ million in the third quarter and first nine months of 2024, respectively.

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was signed into law. The OBBBA makes permanent many of the expired and expiring tax provisions originally enacted in the Tax Cuts and Jobs Act of 2017, including the immediate expensing of domestic research and development expenditures, more favorable business interest deductibility and 100 percent first-year bonus depreciation on qualifying property with effective dates in 2025. In accordance with Accounting Standards Codification (“ASC”) 740, “Income Taxes,” the Company has recognized the effects of the OBBBA during the current quarter for the provisions currently enacted, which has increased the Company’s deferred tax liability. The Company anticipates that the OBBBA will reduce its federal income tax liability and related tax payments for the current and future years but will not have a significant impact on its annual effective tax rate.

NOTE 11.

reportable segments, Manufacturing and Distribution, which are defined based on the way in which internally reported information is regularly reviewed and evaluated by the Company’s chief operating decision maker (the "CODM"), who is our Chairman and Chief Executive Officer, to allocate resources, evaluate financial results and make decisions. The Company does not measure profitability at the end market (RV, marine, powersports, MH and industrial) level.

Manufacturing – This segment includes the following products: laminated products that are utilized to produce furniture, shelving, walls, countertops and cabinet products; cabinet doors; fiberglass bath fixtures and tile systems; hardwood furniture; vinyl printing; RV and marine furniture; audio systems and accessories, including amplifiers, tower speakers, soundbars, and subwoofers; decorative vinyl and paper laminated panels; solid surface, granite, and quartz countertop fabrication; RV painting; fabricated aluminum products; fiberglass and plastic components; fiberglass bath fixtures and tile systems; softwoods lumber; custom cabinetry; polymer-based and other flooring; electrical systems

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$ $ Cost of goods sold Gross profit$ $ $ Operating expenses Operating income$ $ $ Reconciliation of reportable segment operating income to consolidated income before income tax:Selling, general and administrative Amortization of intangible assets Interest expense, net Elimination of inter-segment profits()Consolidated income before income taxes$ Capital expenditures$ $ $ Depreciation and amortization$ $ $

$ $

Cost of goods sold

Gross Profit

$ $ $

Operating expenses

Operating income

$ $ $

Reconciliation of reportable segment operating income to consolidated income before income tax:

Selling, general and administrative

Amortization of intangible assets

Interest expense, net

Elimination of inter-segment profits

()

Consolidated income before income taxes

$ Capital expenditures$ $ $

Depreciation and amortization

$ $ $

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$ $ Cost of goods sold Gross profit$ $ $ Operating expenses Operating income$ $ $ Reconciliation of reportable segment operating income to consolidated income before income tax:Selling, general and administrative Amortization of intangible assets Interest expense, net Elimination of inter-segment profits()Other expenseConsolidated income before income taxes$ Capital expenditures$ $ $ Depreciation and amortization$ $ $

Nine Months Ended September 29, 2024

($ in thousands)

Manufacturing

Distribution

Total

Total net sales

Cost of goods sold

Gross profit

Operating expenses

Operating income

Reconciliation of reportable segment operating income to consolidated income before income tax:

Selling, general and administrative

Amortization of intangible assets

Interest expense, net

Elimination of inter-segment profits

()

Consolidated income before income taxes

Capital expenditures

Depreciation and amortization

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$ $ $ Elimination of inter-segment sales()()()()Consolidated net sales$ $ $ $ Depreciation and amortization:Depreciation and amortization for reportable segments$ $ $ $ Corporate depreciation and amortization Consolidated depreciation and amortization$ $ $ $ Capital expenditures:Capital expenditures for reportable segments$ $ $ $ Corporate capital expenditures Consolidated capital expenditures$ $ $ $

As of

($ in thousands)

September 28, 2025

December 31, 2024

Total assets:

Manufacturing segment assets

Distribution segment assets

Corporate assets unallocated to segments

Cash and cash equivalents

Consolidated total assets

NOTE 12.

months under the current stock repurchase program to $ million, including the $ million remaining under the previous authorization. As of September 28, 2025, Patrick had approximately $ million remaining in the amount of the Company's common stock that may be acquired under the current stock repurchase program. Average price$ $ $ $ Aggregate cost$ $ $ $

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NOTE 13.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the results of operations, financial condition and cash flows of Patrick Industries, Inc. This MD&A should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and Notes thereto included in Item 1 of this Report. In addition, this MD&A contains certain statements relating to future results which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. See “Information Concerning Forward-Looking Statements” on page 35 of this Report. The Company undertakes no obligation to update these forward-looking statements.

OVERVIEW OF MARKETS AND RELATED INDUSTRY PERFORMANCE

Third Quarter and First Nine Months of 2025 Financial Overview

Recreational Vehicle ("RV") Industry

The Company’s RV products are sold primarily to major manufacturers of RVs, smaller original equipment manufacturers ("OEMs"), and to a lesser extent, manufacturers in adjacent industries. The principal types of recreational vehicles include (1) towables: conventional travel trailers, fifth wheels, folding camping trailers, and truck campers; and (2) motorized: class A (large motor homes), class B (van campers), and class C (small-to-mid size motor homes).

The RV industry is our primary market and comprised 44% and 46% of the Company's net sales in the third quarter and nine months ended September 28, 2025, respectively, and 43% and 44% in the third quarter and nine months ended September 29, 2024. Net sales to the RV industry in the third quarter and nine months ended September 28, 2025 increased 7% and 9%, respectively, compared to the prior year periods.

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According to the RV Industry Association ("RVIA"), RV wholesale unit shipments in the third quarter of 2025 totaled approximately 76,500 units, a decrease of 2% from approximately 77,800 units in the third quarter of 2024. While we estimate RV industry retail unit sales in the third quarter of 2025 remained flat compared to the third quarter of 2024, we estimate that retail unit sales exceeded wholesale unit shipments in the third quarter of 2025 as RV OEMs maintained lower production volumes.

RV wholesale unit shipments for the first nine months of 2025 totaled approximately 267,200 units, an increase of 4% from approximately 256,400 units in the first nine months of 2024. While we estimate RV industry retail unit sales in the first nine months of 2025 decreased by approximately 1% compared to the first nine months of 2024, we estimate that retail unit sales exceeded wholesale unit shipments which resulted in improved alignment of dealer inventory levels with current retail demand.

Marine Industry

The Company’s sales to the marine industry are primarily focused on the powerboat sector of the market which is comprised of four main categories: fiberglass, aluminum fishing, pontoon and ski & wake.

Net sales to the marine industry comprised 15% of the Company's net sales in both the third quarter and nine months ended September 28, 2025 and 15% and 16% in the third quarter and nine months ended September 29, 2024, respectively. Net sales to the marine industry in the third quarter and nine months ended September 28, 2025 increased 11% and 2%, respectively, compared to the prior year periods.

Our marine revenue is generally correlated to marine industry wholesale powerboat unit shipments. According to Company estimates based on data published by the National Marine Manufacturers Association ("NMMA"), wholesale powerboat unit shipments remained flat in the third quarter of 2025 compared to the third quarter of 2024 and decreased 4% in the first nine months of 2025 compared to the prior year period.

We estimate that marine industry retail powerboat unit sales decreased 6% and 8% in the third quarter and first nine months of 2025, respectively, compared to the prior year periods, primarily due to the current macroeconomic environment faced by the end consumer, such as economic uncertainty and elevated interest rates.

Powersports Industry

Through acquisitions completed in recent years, the Company entered the powersports end market. Powersports is a category of motorsports which includes vehicles such as motorcycles, all-terrain vehicles ("ATVs"), side-by-sides, snowmobiles, scooters, golf carts and other personal transportation vehicles, and other related categories. Our powersports business is primarily focused on the utility and premium segments of the side-by-side market, which have been outperforming the more discretionary recreational segment. We also participate in the motorcycle and golf cart segments of the market. OEMs and dealers are actively managing field inventory levels to align dealer inventories with retail demand.

Net sales to the powersports industry comprised 10% and 9% of the Company's net sales in the third quarter and nine months ended September 28, 2025, respectively, and 10% and 9% in the third quarter and nine months ended September 29, 2024, respectively. Net sales to the powersports industry increased 12% in the third quarter of 2025 and remained flat for the nine months ended September 28, 2025 compared to the prior year periods.

Manufactured Housing ("MH") Industry

The Company’s products for this market are sold primarily to major manufacturers of manufactured homes, other OEMs, and to a lesser extent, manufacturers in adjacent industries. Factors that may favorably impact demand in this industry include jobs growth, consumer confidence, favorable changes in financing regulations, a narrowing in the difference between interest rates on MH loans and mortgages on traditional residential "site-built" housing, and any improvement in conditions in the asset-backed securities markets for manufactured housing loans.

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Net sales to the MH industry comprised 18% and 17% of the Company's net sales in the third quarter and nine months ended September 28, 2025, respectively, and 19% and 18% in the third quarter and nine months ended September 29, 2024, respectively. Net sales to the MH industry in the third quarter and nine months ended September 28, 2025 decreased 2% and increased 4%, respectively, compared to the prior year periods. According to Company estimates based on industry data from the Manufactured Housing Institute, MH industry wholesale unit shipments decreased 2% in the third quarter compared to the prior year quarter, primarily driven by the timing of OEMs production schedules and dealer orders following elevated shipment activity earlier in the year, as well as disciplined dealer inventory management.

MH industry wholesale unit shipments increased 3% in the first nine months of 2025 compared to the prior year period, primarily driven by OEMs increasing production in the first half of 2025.

Industrial Market

The industrial market is comprised primarily of kitchen cabinet, countertop, hospitality, retail and commercial fixtures, and office and household furniture markets and regional distributors.

Net sales to the industrial market comprised 13% of the Company's net sales in both the third quarter and nine months ended September 28, 2025 and in both the third quarter and nine months ended September 29, 2024. Net sales to the industrial market in the third quarter and nine months ended September 28, 2025 increased 4% and 3%, respectively, compared to the prior year periods. Overall, our revenues in these markets are focused on residential and multifamily housing, hospitality, high-rise housing and office, commercial construction and institutional furniture markets. We estimate that, in general, approximately 70% to 80% of our industrial business is directly tied to the residential housing market, with the remaining 20% to 30% tied to the non-residential and commercial markets.

According to the Company estimates based on U.S. Census Bureau data, combined new housing starts decreased 2% in the third quarter of 2025 compared to the prior year quarter, reflecting a decrease in single-family housing starts of 5%, offset by an increase in multifamily housing starts of 7%.

For the first nine months of 2025, combined new housing starts decreased 1% compared to the prior year period, reflecting a decrease in single-family housing starts of 5%, offset by an increase in multifamily housing starts of 14%. Our industrial products are generally among the last components installed in new unit construction and as such our related sales typically trail new housing starts by four to six months.

RESULTS OF OPERATIONS

Third Quarter and Nine Months Ended September 28, 2025 Compared to 2024

The following table sets forth the percentage relationship to net sales of certain items on the Company’s Condensed Consolidated Statements of Income.


	Third Quarter Ended								Amount Change		% Change
($ in thousands)	September 28, 2025				September 29, 2024
Net sales	$	975,631	100.0	%	$	919,444	100.0	%	$	56,187	6	%
Cost of goods sold	754,667		77.4	%	706,930		76.9	%	47,737		7	%
Gross profit	220,964		22.6	%	212,514		23.1	%	8,450		4	%
Warehouse and delivery expenses	44,449		4.6	%	37,865		4.1	%	6,584		17	%
Selling, general and administrative expenses	86,022		8.8	%	75,783		8.2	%	10,239		14	%
Amortization of intangible assets	24,200		2.5	%	24,449		2.7	%	(249)		(1)	%
Operating income	66,293		6.8	%	74,417		8.1	%	(8,124)		(11)	%
Interest expense, net	18,451		1.9	%	20,050		2.2	%	(1,599)		(8)	%

Income taxes	12,539		1.3	%	13,501		1.5	%	(962)		(7)	%
Net income	$	35,303	3.6	%	$	40,866	4.4	%	$	(5,563)	(14)	%

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	Nine Months Ended								Amount Change		% Change
($ in thousands)	September 28, 2025				September 29, 2024
Net sales	$	3,026,605	100.0	%	$	2,869,560	100.0	%	$	157,045	5	%
Cost of goods sold	2,326,418		76.9	%	2,220,897		77.4	%	105,521		5	%
Gross profit	700,187		23.1	%	648,663		22.6	%	51,524		8	%
Warehouse and delivery expenses	135,106		4.5	%	114,053		4.0	%	21,053		18	%
Selling, general and administrative expenses	273,159		9.0	%	244,617		8.5	%	28,542		12	%
Amortization of intangible assets	73,338		2.4	%	71,545		2.5	%	1,793		3	%
Operating income	218,584		7.2	%	218,448		7.6	%	136		—	%
Interest expense, net	56,432		1.9	%	60,483		2.1	%	(4,051)		(7)	%
Other expenses	24,420		0.8	%	—		—	%	24,420		N/A
Income taxes	31,755		1.0	%	34,122		1.2	%	(2,367)		(7)	%
Net income	$	105,977	3.5	%	$	123,843	4.3	%	$	(17,866)	(14)	%

Net Sales. Net sales in the third quarter of 2025 increased $56.2 million, or 6%, to $975.6 million compared to $919.4 million in the third quarter of 2024. Net sales in the third quarter of 2025 increased due to increased sales to the RV, marine, powersports and industrial markets, partially offset by decreased sales to the MH market. Sales to the RV market increased $29.0 million, or 7%, compared to the prior year quarter, primarily attributable to the Company's acquisition of ICON Direct LLC, doing business as RecPro ("RecPro") in the third quarter of 2024. Sales to the marine market increased $14.5 million, or 11%, primarily attributable to acquisitions completed in the first nine months of 2025. Sales to the powersports market increased $10.4 million, or 12%, compared to the prior year quarter, primarily related to higher OEM production volumes in alignment with retail demand. Sales to the industrial market increased $5.0 million, or 4%, compared to the prior year quarter, which is attributable to market share gains and product mix shifts by certain customers. Sales to the MH market decreased $2.7 million, or 2%, compared to the prior year quarter, primarily due to a decrease in estimated MH industry wholesale unit shipments of approximately 2%.

Net sales in the first nine months of 2025 increased $157.0 million, or 5%, to $3.03 billion compared to $2.87 billion in the first nine months of 2024. Net sales in the first nine months of 2025 increased due to increased sales to each of our markets. Sales to the RV market increased $116.5 million, or 9%, compared to the first nine months of 2024, due to the Company's acquisition of RecPro in the third quarter of 2024, industry volume growth and market share gain. Sales to the MH market increased $22.2 million, or 4%, compared to the first nine months of 2024, primarily due to an increase in estimated MH industry wholesale unit shipments of approximately 3%. Sales to the industrial market increased $10.1 million, or 3%, compared to the first nine months of 2024, primarily related to product mix shifts by certain customers. Sales to the marine market increased $7.0 million, or 2%, compared to the first nine months of 2024, primarily attributable to acquisitions completed in the first nine months of 2025. Sales to the powersports market increased $1.2 million and flat compared to the first nine months of 2024, primarily related to higher OEM production volumes in alignment with retail demand.

Revenue attributable to acquisitions completed in the first nine months of 2025 was $11.0 million and $24.2 million in the third quarter and first nine months of 2025, respectively. Revenue attributable to acquisitions completed in the first nine months of 2024 was $78.6 million and $216.4 million in the third quarter and first nine months of 2024, respectively.

Cost of Goods Sold. Cost of goods sold increased $47.7 million, or 7%, to $754.7 million in the third quarter of 2025 compared to $706.9 million in the third quarter of 2024. As a percentage of net sales, cost of goods sold increased 50 basis points in the third quarter of 2025 to 77.4% compared to 76.9% in the third quarter of 2024.

Cost of goods sold as a percentage of net sales increased in the third quarter of 2025 primarily as a result of an increase in material costs of 110 basis points, partially offset by decreases in labor and manufacturing overhead costs of 40 and 20 basis points, respectively.

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Cost of goods sold increased $105.5 million, or 5%, to $2.33 billion in the first nine months of 2025 from $2.22 billion in the first nine months of 2024. As a percentage of net sales, cost of goods sold decreased 50 basis points in the first nine months of 2025 to 76.9% compared to 77.4% in the first nine months of 2024.

Cost of goods sold as a percentage of net sales decreased in the first nine months of 2025 primarily as a result of continued cost reduction and automation initiatives we deployed throughout 2024 and into 2025 that had a positive impact on labor and overhead costs. The decrease in cost of goods sold as a percentage of net sales in the first nine months of 2025 primarily reflected a 50 basis point decrease in labor costs. In general, the Company's cost of goods sold percentage can be impacted from quarter-to-quarter by demand changes in certain market sectors that can result in fluctuating costs of certain raw materials and commodity-based components that are utilized in production.

Gross Profit. Gross profit increased $8.5 million, or 4%, to $221.0 million in the third quarter of 2025 compared to $212.5 million in the prior year period. As a percentage of net sales, gross profit decreased 50 basis points to 22.6% in the third quarter of 2025 compared to 23.1% in the prior year period.

Gross profit increased $51.5 million, or 8%, to $700.2 million in the first nine months of 2025 compared to $648.7 million in the prior year period. As a percentage of net sales, gross profit increased 50 basis points to 23.1% in the first nine months of 2025 compared to 22.6% in the prior year period. The change in gross profit as a percentage of net sales in the third quarter and first nine months of 2025 compared to the same periods in 2024 reflects the impact of the factors discussed above under "Cost of Goods Sold".

Warehouse and Delivery Expenses. Warehouse and delivery expenses increased $6.6 million, or 17%, to $44.4 million in the third quarter of 2025 compared to $37.9 million in the third quarter of 2024. As a percentage of net sales, warehouse and delivery expenses increased 50 basis points to 4.6% in third quarter of 2025 compared to 4.1% the third quarter of 2024.

Warehouse and delivery expenses increased $21.1 million, or 18%, to $135.1 million in the first nine months of 2025 compared to $114.1 million in the prior year period. As a percentage of net sales, warehouse and delivery expenses increased 50 basis points to 4.5% in the first nine months of 2025 compared to 4.0% in the first nine months of 2024.

The increase in warehouse and delivery expenses in the third quarter and first nine months of 2025 compared to the same periods in 2024 is primarily attributable to the increase in sales, and the increase as a percentage of net sales is primarily related to higher freight costs.

Selling, General and Administrative ("SG&A") Expenses. SG&A expenses increased $10.2 million, or 14%, to $86.0 million in the third quarter of 2025 compared to $75.8 million in the prior year quarter. The increase in SG&A expenses in the third quarter of 2025 compared to the prior year quarter is primarily related to increased incentive compensation and wages.

As a percentage of net sales, SG&A expenses increased 60 basis points to 8.8% in the third quarter of 2025 compared to 8.2% in the third quarter of 2024. The increase in SG&A expenses as a percentage of net sales in the third quarter of 2025 is primarily attributable to increased incentive compensation expense as a percentage of net sales, partially offset by decreased administrative expenses as a percentage of net sales.

SG&A expenses increased $28.5 million, or 12%, to $273.2 million in the first nine months of 2025 compared to $244.6 million in the prior year period. The increase in SG&A expenses in the first nine months of 2025 compared to 2024 is primarily attributable to the cost profile of certain 2024 acquisitions, increased wages, incentive compensation expenses, insurance expenses, technology expenses, loss on sale of assets, and selling expenses, partially offset by decreased professional fees and administrative expenses.

As a percentage of net sales, SG&A expenses increased 50 basis points to 9.0% in the first nine months of 2025 compared to 8.5% in the prior year period. The increase in SG&A expenses as a percentage of net sales in the first nine months of 2025 is primarily attributable to increased selling expenses, insurance expenses, wages, loss on sale of assets, technology expenses, and incentive compensation.

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Amortization of Intangible Assets. Amortization of intangible assets decreased $0.2 million, or 1%, to $24.2 million in the third quarter of 2025 compared to $24.4 million in the prior year quarter. Amortization of intangible assets increased $1.8 million, or 3%, to $73.3 million in the first nine months of 2025 compared to $71.5 million in the prior year period. The increase in the first nine months of 2025 compared to the comparable prior year period primarily reflects the impact of the RecPro acquisition as well as other acquisitions completed in 2025 and 2024.

Operating Income. Operating income decreased $8.1 million, or 11%, to $66.3 million in the third quarter of 2025 compared to $74.4 million in the third quarter of 2024. As a percentage of net sales, operating income decreased to 6.8% in the third quarter of 2025 compared to 8.1% in the third quarter of 2024. The decrease in operating income and operating income as a percentage of net sales is primarily attributable to the items discussed above.

Operating income increased $0.1 million to $218.6 million in the first nine months of 2025 compared to $218.4 million in the prior year period. Operating income as a percentage of net sales decreased to 7.2% in the first nine months of 2025 compared to 7.6% in the first nine months of 2024. The increase in operating income is primarily attributable to increased net sales, partially offset by an increase in operating expenses and the items discussed above. The increase in operating income and the decrease in operating income as a percentage of net sales are primarily attributable to the items discussed above.

Interest Expense, Net. Interest expense decreased $1.6 million, or 8%, to $18.5 million in the third quarter of 2025 compared to $20.1 million in the prior year quarter. Interest expense decreased $4.1 million, or 7%, to $56.4 million in the first nine months of 2025 compared to $60.5 million in the first nine months of 2024. The decrease primarily reflects a lower average interest rate on our outstanding debt compared to the prior year periods.

Other Expenses. Other expenses were $24.4 million in the first nine months of 2025 compared to zero in the prior year period, reflecting expenses related to a legal settlement.

Income Taxes. Income tax expense decreased $1.0 million in the third quarter of 2025 to $12.5 million compared to $13.5 million in the prior year quarter. Income tax expense decreased $2.4 million in the first nine months of 2025 to $31.8 million compared to $34.1 million in the prior year period. The effective tax rate was 26.2% and 23.1% in the third quarter and first nine months of 2025, respectively, and 24.8% and 21.6% in the third quarter and first nine months of 2024, respectively.

The decrease in income tax expense in the third quarter and the first nine months of 2025 compared to the same periods in 2024 is primarily related to the decrease in income before taxes and decreased excess tax benefits on share-based compensation.

SEGMENT REPORTING

The Company's reportable segments, Manufacturing and Distribution, are based on its method of internal reporting. The Company regularly evaluates the performance of the Manufacturing and Distribution segments and allocates resources to them based on a variety of indicators including sales and operating income. The Company does not measure profitability at the customer end market (RV, marine, powersports, MH and industrial) level.

Third Quarter and Nine Months Ended September 28, 2025 Compared to 2024

General

In the discussion that follows, sales attributable to the Company’s reportable segments include inter-segment sales and gross profit includes the impact of inter-segment operating activity.

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The table below presents information about the sales, gross profit and operating income of the Company’s reportable segments. A reconciliation of consolidated net sales and operating income is presented in Note 11 "Segment Information" of the Notes to Condensed Consolidated Financial Statements.


	Third Quarter Ended				Amount Change		% Change
($ in thousands)	September 28, 2025		September 29, 2024
Sales
Manufacturing	$	722,826	$	685,296	$	37,530	5%
Distribution	$	259,037	$	239,135	$	19,902	8%
Gross Profit
Manufacturing	$	158,785	$	153,793	$	4,992	3%
Distribution	$	59,767	$	53,230	$	6,537	12%
Operating Income
Manufacturing	$	84,405	$	86,429	$	(2,024)	(2)%
Distribution	$	23,183	$	23,400	$	(217)	(1)%


	Nine Months Ended				Amount Change		% Change
($ in thousands)	September 28, 2025		September 29, 2024
Sales
Manufacturing	$	2,253,833	$	2,139,598	$	114,235	5%
Distribution	$	790,611	$	747,269	$	43,342	6%
Gross Profit
Manufacturing	$	507,464	$	488,711	$	18,753	4%
Distribution	$	193,642	$	161,419	$	32,223	20%
Operating Income
Manufacturing	$	285,649	$	282,631	$	3,018	1%
Distribution	$	80,601	$	77,278	$	3,323	4%

Manufacturing

Sales. Manufacturing segment sales increased $37.5 million, or 5%, to $722.8 million in the third quarter of 2025 compared to $685.3 million in the prior year quarter. For the first nine months of 2025, sales increased $114.2 million, or 5%, to $2.25 billion compared to $2.14 billion in the prior year period. The manufacturing segment accounted for approximately 74% of the Company’s sales for both the third quarter and first nine months of 2025 and for both the third quarter and first nine months 2024.

Manufacturing segment sales in the third quarter of 2025 compared to the prior year quarter increased due to increased sales to the RV, marine, powersports and industrial markets, partially offset by decreased sales to the MH market. Sales to the RV market increased 6%, primarily attributable to market share gains. Sales to the marine market increased 12%, primarily attributable to acquisitions completed in the first nine months of 2025. Sales to the powersports market increased 11% compared to the prior year quarter. Sales to the industrial market increased 4% compared to the prior year quarter. Sales to the MH market decreased 5% compared to the prior year quarter, primarily due to a decrease in estimated MH industry wholesale unit shipments of approximately 2%.

Manufacturing segment sales in the first nine months of 2025 compared to the same prior year period increased due to increased sales to the RV, industrial, MH and marine markets, partially offset by decreased sales to the powersports market. Sales to the RV market increased 11% compared to the first nine months of 2024, primarily attributable to an increase in estimated wholesale units shipments of 4% and market share gains compared to the first nine months of 2024. Sales to the industrial market increased 2% compared to the first nine months of 2024. Sales to the MH market increased

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3% compared to the first nine months of 2024, primarily due to an increase in estimated MH industry wholesale unit shipments of approximately 3% and market share gains. Sales to the marine market increased 2% compared to the first nine months of 2024, primarily attributable to acquisitions completed in 2024 and 2025. Sales to the powersports market decreased 1% compared to the first nine months of 2024, primarily related to lower OEM production volumes.

Manufacturing segment sales attributable to acquisitions completed in the first nine months of 2025 were $11.0 million and $24.2 million in the third quarter and first nine months of 2025, respectively. Manufacturing segment sales attributable to acquisitions completed in the first nine months of 2024 were $73.9 million and $211.7 million in the third quarter and first nine months of 2024, respectively.

Gross Profit. Manufacturing segment gross profit increased $5.0 million, or 3%, to $158.8 million in the third quarter of 2025 compared to $153.8 million in the third quarter of 2024. As a percentage of sales, gross profit decreased 40 basis points to 22.0% in the third quarter of 2025 compared to 22.4% in the prior year quarter. The decrease in gross profit as a percentage of sales in the third quarter of 2025 compared to the same period in 2024 is attributable to increased material costs as a percentage of sales, partially offset by decreased manufacturing overhead costs as a percentage of sales.

Manufacturing segment gross profit increased $18.8 million, or 4%, to $507.5 million in the first nine months of 2025 compared to $488.7 million in the first nine months of 2024. As a percentage of sales, gross profit decreased 30 basis points to 22.5% in the first nine months of 2025 compared to 22.8% in the prior year period. The decrease in gross profit as a percentage of sales in the first nine months of 2025 compared to the same period in 2024 is attributable to increased material costs as a percentage of sales, partially offset by decreased labor and overhead costs as a percentage of sales.

Operating Income. Operating income decreased $2.0 million, or 2%, to $84.4 million in the third quarter of 2025 compared to $86.4 million in the prior year quarter. As a percentage of sales, operating income decreased 90 basis points to 11.7% in the third quarter of 2025 compared to 12.6% in the prior year period. The decrease in operating income and operating income as a percentage of sales is primarily related to the items discussed above combined with an increase in operating expenses and operating expenses as a percentage of sales.

Operating income increased $3.0 million, or 1%, to $285.6 million in the first nine months of 2025 compared to $282.6 million in the prior year period. As a percentage of sales, operating income decreased 50 basis points to 12.7% in the first nine months of 2025 compared to 13.2% in the prior year period. The increase in operating income is primarily attributable to increased sales, partially offset by an increase in operating expenses. The decrease in operating income as a percentage of sales is primarily related to the items discussed above combined with an increase in operating expenses.

Distribution

Sales. Distribution segment sales increased $19.9 million, or 8%, to $259.0 million in the third quarter of 2025 compared to $239.1 million in the prior year quarter. For the first nine months of 2025, sales increased $43.3 million, or 6%, to $790.6 million compared to $747.3 million in the prior year period. The distribution segment accounted for approximately 26% of the Company’s sales for both the third quarter and first nine months of 2025 and for both the third quarter and first nine months of 2024.

Distribution segment sales in the third quarter of 2025 compared to the third quarter of 2024 increased due to increased sales to the RV, powersports, MH, and industrial markets, partially offset by decreased sales to the marine market. Sales to the RV market increased 9% compared to the prior year quarter, primarily attributable to market share gains and acquisitions completed in 2024. Sales to the powersports market increased $1.0 million, or 33%, compared to the prior year quarter, primarily attributable to market share gains. Sales to the MH market increased $0.8 million, or 1%, compared to the prior year quarter. Sales to the industrial market increased $0.5 million, or 5%, compared to the prior year quarter. Sales to the marine market decreased $0.6 million, or 6%, compared to the prior year quarter.

Distribution segment sales in the first nine months of 2025 compared to the first nine months of 2024 increased due to increased sales to the RV, MH, powersports and industrial markets, partially offset by decreased sales to the marine market. Sales to the RV market increased 6% compared to the first nine months of 2024, due to industry wholesale unit shipment growth of 4%, market share gains and acquisitions completed in 2024. Sales to the MH market increased 5% compared to the first nine months of 2024, primarily due to an increase in estimated MH industry wholesale unit

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shipments of approximately 3%. Sales to the powersports market increased $3.1 million, or 34%, compared to the first nine months of 2024, primarily attributable to market share gains and acquisitions completed in 2024. Sales to the industrial market increased $2.5 million, or 9%, compared to the first nine months of 2024. Sales to the marine market decreased $0.4 million, or 1%, compared to the first nine months of 2024.

Distribution segment sales attributable to acquisitions completed in the first nine months of 2024 were approximately $4.7 million in both the third quarter and first nine months of 2024.

Gross Profit. Distribution segment gross profit increased $6.5 million, or 12%, to $59.8 million in the third quarter of 2025 compared to $53.2 million in the third quarter of 2024. As a percentage of sales, gross profit increased 80 basis points to 23.1% in the third quarter of 2025 compared to 22.3% in the prior year quarter. The increase in gross profit as a percentage of sales in the third quarter of 2025 compared to the same quarter in 2024 is attributable to decreased labor costs as a percentage of sales, partially offset by increased material costs as a percentage of sales.

Distribution segment gross profit increased $32.2 million, or 20%, to $193.6 million in the first nine months of 2025 compared to $161.4 million in the first nine months of 2024. As a percentage of sales, gross profit increased 290 basis points to 24.5% in the first nine months of 2025 compared to 21.6% in the prior year period. The increase in gross profit as a percentage of sales in the first nine months of 2025 compared to 2024 is attributable to decreased material and labor costs as a percentage of sales.

Operating Income. Operating income decreased $0.2 million, or 1%, to $23.2 million in the third quarter of 2025 compared to $23.4 million in the prior year quarter. As a percentage of sales, operating income decreased 90 basis points to 8.9% in the third quarter of 2025 compared to 9.8% in the same period in 2024. The decrease in operating income and operating income as a percentage of sales is primarily related to the items discussed above, offset by an increase in operating expenses and operating expense as a percentage of sales.

Operating income increased $3.3 million, or 4%, to $80.6 million in the first nine months of 2025 compared to $77.3 million in the prior year period. As a percentage of sales, operating income decreased 10 basis points to 10.2% in the first nine months of 2025 compared to 10.3% in the same period in 2024. The increase in operating income and the decrease in operating income as a percentage of sales primarily reflect the items discussed above, as well as an increase in operating expenses and operating expense as a percentage of sales.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of liquidity are cash flows from operations, available cash reserves and borrowing capacity available under the revolving credit and term loan facility (the “2024 Credit Facility”), as discussed in Note 8 "Debt" of the Notes to Condensed Consolidated Financial Statements. Our liquidity as of September 28, 2025 consisted of cash and cash equivalents of $20.7 million and $758.0 million of availability under the 2024 Credit Facility, net of $7.0 million of outstanding letters of credit.

As of September 28, 2025, the Company's existing cash and cash equivalents, cash generated from operations, and available borrowings under the 2024 Credit Facility are expected to be sufficient to meet anticipated cash needs for working capital and capital expenditures for at least the next 12 months, exclusive of any acquisitions, based on the Company's current cash flow budgets and forecast of short-term and long-term liquidity needs.

Principal uses of cash are to support working capital demands, meet debt service requirements and support the Company's capital allocation strategy, which includes acquisitions, capital expenditures, dividends and repurchases of the Company’s common stock, among others.

Working capital requirements vary from period to period depending on manufacturing volumes primarily related to the RV, marine, powersports, MH and industrial markets we serve, the timing of deliveries, and the payment cycles of customers. In the event that operating cash flow is inadequate and one or more of the Company's capital resources were to become unavailable, the Company would seek to revise its operating strategies accordingly. The Company will continue to assess its liquidity position and potential sources of supplemental liquidity in view of operating performance, current economic and capital market conditions, and other relevant circumstances.

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In the first nine months of 2025, the Company utilized available borrowing capacity under the Revolver due 2029 and cash on hand to fund three acquisitions, as discussed in Note 5 "Acquisitions" of the Notes to Condensed Consolidated Financial Statements.

As of and for the reporting period ended September 28, 2025, the Company was in compliance with its financial covenants as required under the terms of the credit agreement that established the 2024 Credit Facility (the “2024 Credit Agreement”). The required maximum consolidated secured net leverage ratio and the required minimum consolidated interest coverage ratio, as such ratios are defined in the 2024 Credit Agreement, compared to the actual amounts as of September 28, 2025 and for the fiscal period then ended are as follows:


	Required	Actual
Consolidated secured net leverage ratio (12-month period)	2.75	0.45
Consolidated interest coverage ratio (12-month period)	3.00	6.57

In addition, as of September 28, 2025, the Company's consolidated total net leverage ratio (12-month period) was 2.84. While this ratio is not a covenant under the 2024 Credit Agreement, it is used in determining the applicable borrowing margin under the 2024 Credit Agreement.

Cash Flows

Operating Activities: Cash flows from operating activities are one of the Company's primary sources of liquidity, representing the net income the Company earned in the reported periods, adjusted for certain non-cash items and changes in operating assets and liabilities.

Net cash provided by operating activities decreased $25.6 million, or 11%, to $198.6 million in the first nine months of 2025 compared to $224.2 million in the first nine months of 2024. The decrease in operating cash flows is primarily attributable to a $74.8 million use of cash from operating assets and liabilities, net of business acquisitions compared to a $40.4 million use of cash in the prior year period and a $17.9 million decrease in net income, partially offset by a $21.8 million increase in deferred income taxes and a $2.5 million increase in loss on sale of assets compared to the first nine months of 2024.

Investing Activities: Net cash used in investing activities decreased $348.5 million to $136.9 million in the first nine months of 2025 compared to $485.4 million in the first nine months of 2024 due to a decrease in cash used in business acquisitions, which were $70.3 million in the first nine months of 2025 compared to $411.6 million in the first nine months of 2024, primarily due to the acquisition of Sportech in January 2024 and RecPro in September 2024.

Financing Activities: Net cash used in financing activities was $74.5 million in the first nine months of 2025 compared to $302.4 million of net cash provided by financing activities in the first nine months of 2024, primarily due to a decrease in net borrowings under our revolving credit facility to $10.0 million in the first nine months of 2025 compared to $365.0 million in the first nine months of 2024.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

See Note 1, “Basis of Presentation and Significant Accounting Policies” to the accompanying Condensed Consolidated Financial Statements.

CRITICAL ACCOUNTING POLICIES

There have been no material changes to our critical accounting policies which are summarized in the MD&A in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025.

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OTHER

Seasonality

Manufacturing operations in the RV, marine, powersports and MH industries historically have been seasonal and at their highest levels when the weather is moderate. Accordingly, the Company’s sales and profits had generally been the highest in the second quarter and lowest in the fourth quarter. Seasonal industry trends in the past several years have included the impact related to the addition of major RV manufacturer open houses for dealers in the August-September timeframe and marine open houses in the December-February timeframe, resulting in dealers delaying certain restocking purchases until new product lines are introduced at these shows. In addition, recent seasonal industry trends have been, and future trends may be, different than in prior years due to volatile economic conditions, interest rates, access to financing, cost of fuel, national and regional economic conditions and consumer confidence on retail sales of RVs, powersports and marine units and other products for which the Company sells its components, as well as fluctuations in RV, powersports and marine dealer inventories, increased volatility in demand from RV, powersports and marine dealers, the timing of dealer orders, and from time to time, the impact of severe weather conditions on the timing of industry-wide wholesale shipments.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

The Company makes forward-looking statements with respect to financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities for existing products, plans and objectives of management, markets for the common stock of Patrick Industries, Inc. and other matters from time to time and desires to take advantage of the “safe harbor” which is afforded such statements under the Private Securities Litigation Reform Act of 1995 when they are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statements. The statements contained in the foregoing “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as other statements contained in this quarterly report and statements contained in future filings with the Securities and Exchange Commission (“SEC”), publicly disseminated press releases, quarterly earnings conference calls, and statements which may be made from time to time in the future by management of the Company in presentations to shareholders, prospective investors, and others interested in the business and financial affairs of the Company, which are not historical facts, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. Any projections of financial performance or statements concerning expectations as to future developments should not be construed in any manner as a guarantee that such results or developments will, in fact, occur. There can be no assurance that any forward-looking statement will be realized or that actual results will not be significantly different from those set forth in such forward-looking statement. The Company does not undertake to publicly update or revise any forward-looking statements. Information about certain risks that could affect our business and cause actual results to differ from those expressed or implied in the forward-looking statements are contained in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and in the Company's Forms 10-Q for subsequent quarterly periods, which are filed with the SEC and are available on the SEC’s website at www.sec.gov.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Debt Obligations

As of September 28, 2025, our total debt obligations under our 2024 Credit Agreement were under Secured Overnight Financing Rate ("SOFR")-based interest rates. A 100-basis point increase in the underlying SOFR rates would result in additional annual interest cost of approximately $2.3 million, assuming average borrowings during 2025, including the Revolver due 2029 and Term Loan due 2029, subject to variable rates were equal to the amount of such borrowings outstanding at September 28, 2025, excluding deferred financing costs related to the Revolver due 2029 and Term Loan due 2029.

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Commodity Volatility

The prices of key raw materials, consisting primarily of lauan, gypsum, fiberglass, particleboard, aluminum, softwoods and hardwoods lumber, resin, and petroleum-based products, are influenced by demand and other factors specific to these commodities as well as general inflationary pressures, including those driven by supply chain and logistical disruptions. Prices of certain commodities have historically been volatile and continued to fluctuate in 2025. During periods of volatile commodity prices, we have generally been able to pass both price increases and decreases to our customers in the form of price adjustments. We are exposed to risks during periods of commodity volatility because there can be no assurance future cost increases or decreases, if any, can be partially or fully passed on to customers, or that the timing of such sales price increases or decreases will match raw material cost increases or decreases. We do not believe that commodity price volatility had a material effect on results of operations for the periods presented.

Equity Price Risk

The fair value of the 1.75% Convertible Notes is subject to market risk and other factors due to the conditional conversion feature. The fair value of the 1.75% Convertible Notes will generally increase as our common stock price increases and will generally decrease as our common stock price decreases. The 1.75% Convertible Notes are carried at amortized cost and their fair value is presented for disclosure purposes only.

The Company will satisfy any conversion by paying cash up to the aggregate principal amount of the 1.75% Convertible Notes to be converted and by paying or delivering, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the 1.75% Convertible Notes being converted.

In connection with the pricing of the 1.75% Convertible Notes, we entered into convertible note hedge transactions with certain of the initial purchasers and/or their respective affiliates (the “option counterparties”). At the same time, we entered into warrant transactions with the option counterparties. The convertible note hedge transactions are expected generally to reduce the potential dilution upon conversion of the 1.75% Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes, as the case may be. However, the warrant transactions could separately have a dilutive effect on our common stock to the extent that the market price per share of our common stock exceeds the strike price of the warrants described in Note 9 "Derivative Financial Instruments" included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 20, 2025.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains “disclosure controls and procedures”, as such term is defined under Securities Exchange Act Rule 13a-15(e) or 15d-15(e), that are designed to ensure that information required to be disclosed in our Securities Exchange Act of 1934, as amended (the “Exchange Act”) reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and the Company’s management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to the Company, including consolidated subsidiaries, required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and

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communicated to the Company’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the third quarter ended September 28, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II: OTHER INFORMATION

Items 3 and 4 of Part II are not applicable and have been omitted.

ITEM 1. LEGAL PROCEEDINGS

We are subject to claims and lawsuits 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 its financial condition, results of operations, or cash flows.

See Note 13 "Commitments and Contingencies" to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Recent Sales of Unregistered Securities. None.

(b) Use of Proceeds. None.

The following table summarizes our purchases of common stock in the three months ended September 28, 2025.


Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
June 30 - July 27, 2025	—	$	—	—	$	168,031,000
July 28 - August 31, 2025	124	$	103.03	—	$	168,031,000
September 1 - September 28, 2025	2,657	$	110.99	—	$	168,031,000
	2,781			—

(1)Amount includes 2,781 shares of common stock purchased by the Company in the period for the purpose of satisfying the minimum tax withholding obligations of employees upon the vesting of stock awards held by the employees.

(2)See Note 12 "Stock Repurchase Programs" of the Notes to Condensed Consolidated Financial Statements for additional information about the Company's stock repurchase program.

ITEM 5. OTHER INFORMATION

During the three months ended September 28, 2025, none of our directors or executive officers or any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement" (as defined in Item 408(c) of Regulation S-K).

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ITEM 6. EXHIBITS


Exhibits (1)			Description
31.1			Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer
31.2			Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer
32			Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer and Chief Financial Officer
101			Interactive Data Files. The following materials are filed electronically with this Quarterly Report on Form 10-Q:


			101.INS			Inline XBRL Instance Document
			101.SCH			Inline XBRL Taxonomy Schema Document
			101.CAL			Inline XBRL Taxonomy Calculation Linkbase Document
			101.DEF			Inline XBRL Taxonomy Definition Linkbase Document
			101.LAB			Inline XBRL Taxonomy Label Linkbase Document
			101.PRE			Inline XBRL Taxonomy Presentation Linkbase Document


104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: November 6, 2025	By:	/s/ Andrew C. Roeder
		Andrew C. Roeder
		Executive Vice President - Finance, Chief Financial Officer, and Treasurer



Date: November 6, 2025	By:	/s/ Matthew S. Filer
		Matthew S. Filer
		Senior Vice President - Finance and Chief Accounting Officer

PATRICK INDUSTRIES INC - Quarter Report: 2025 September (Form 10-Q)

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