What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-20 compared with 2024-02-29 · 424 added, 344 removed, 910 unchanged (46% of the section changed)

13 unchanged sentences

This assessment included a review of the documentation of controls, an assessment of the design effectiveness of controls, testing of the operating effectiveness of controls, and a conclusion on this evaluation.

As permitted under SEC guidance, management’s assessment of and conclusion regarding the design and effectiveness of internal control over financial reporting excluded the internal control over financial reporting of the operations of businesses acquired in 2024, which are described in Note 3 "Acquisitions" of the Notes to Consolidated Financial Statements included elsewhere in this Form 10-K.

Businesses acquired in 2024 represented approximately 8% of consolidated net sales for the year ended December 31, 2024 and approximately 3% of consolidated total assets as of December 31, 2024.

Based on our assessment, we have concluded that our internal control over financial reporting was effective as of December 31, 2024.

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Information on our corporate governance practices is contained under the caption “Corporate Governance Highlights” in the Company's 2025 Proxy Statement and incorporated herein by reference.

Insider Trading Policies and Procedures

We have adopted an Insider Trading Policy governing the purchase, sale and other disposition of our securities by directors, officers, and employees that is designed to promote compliance with insider trading laws, rules and regulations, and applicable listing standards, as well as procedures designed to further the foregoing purposes.

In addition, it is our intent to comply with applicable laws and regulations relating to the Company trading in its own securities.

A copy of our Insider Trading Policy is filed with this Annual Report on Form 10-K as Exhibit 19.1

EXECUTIVE COMPENSATION

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(filed as Exhibit 4.1 to the Company's Form 8-K filed on December 13, 2021 and incorporated herein by reference)

4.4 Indenture, dated as of October 22, 2024, among Patrick Industries, Inc., the guarantors from time to time party thereto and U.S.

Bank Trust Company, National Association, as Trustee (filed as Exhibit 4.1 to the Company's Form 8-K filed on October 2 8 , 2024 and incorporated herein by reference).

4.5 Supplemental Indenture, dated as of October 24, 2024, to the indenture dated as of October 22, 2024, among Patrick Industries, Inc., the guarantors from time to time party thereto and U.S.

Bank Trust Company, National Association, as Trustee (filed as Exhibit 4.2 to the Company's Form 8-K filed on October 2 8 , 2024 and incorporated herein by reference).

4.6 Indenture, dated as of October 24, 2024, to the indenture dated as of April 20, 2021, among Patrick Industries, Inc., the guarantors from time to time party thereto and U.S.

Bank Trust Company, National Association, as Trustee (filed as Exhibit 4.3 to the Company's Form 8-K filed on October 2 8 , 2024 and incorporated herein by reference).

4.7 Indenture, dated as of October 24, 2024, to the indenture dated as of December 13, 2021, among Patrick Industries, Inc., the guarantors from time to time party thereto and U.S.

Bank Trust Company, National Association, as Trustee (filed as Exhibit 4.4 to the Company's Form 8-K filed on October 2 8 , 2024 and incorporated herein by reference).

4.8** Description of the Company’s common stock.

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10.3* Form of Non-Qualified Stock Option Agreement (filed as Exhibit 10.3 to the Company’s Form 10-K filed on February 24, 2023 and incorporated herein by reference).

10.4* Form of Officer and Employee Time-Based Restricted Share Award (filed as Exhibit 10.

4 to the Company’s Form 10-K filed on February 24, 2023 and incorporated herein by reference).

10.4* Form of Officer and Employee Time-Based Restricted Share Award (filed as Exhibit 10.4 to the Company’s Form 10-K filed on February 24, 2023 and incorporated herein by reference).

10.5* Form of Officer and Employee Time-Based Restricted Share Award and Performance Contingent Restricted Share Award (filed as exhibit 10.5 to the Company's Form 10-K filed on February 24, 2023 and incorporated herein by reference).

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10.7* Form of Stock Appreciation Rights Agreement (filed as Exhibit 10.7 to the Company’s Form 10-K filed on February 24, 2023 and incorporated herein by reference).

10.8 First amendment to Fourth Amended and Restated Credit Agreement dated August 11, 2022 by and among the Company, the Guarantors, the lenders from time to time a party thereto and Wells Fargo Bank, National Association (filed as Exhibit 10.1 to the Company's Form 8-K filed on August 15, 2022 and incorporated herein by reference).

10.8 Fifth Amended and Restated Credit Agreement dated October 24, 2024 by and among the Company, the Guarantors, the lenders from time to time a party thereto and Wells Fargo Bank, National Association (filed as Exhibit 10.1 to the Company's Form 8-K filed on October 28, 2024 and incorporated herein by reference).

10.9 Base Convertible Bond Hedge Transaction Confirmation, dated as of December 7, 2021, by and between Patrick Industries.

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(filed as Exhibit 10.1 to the Company's Form 8-K filed on January 10, 2022 and incorporated herein by reference)

10.22* Employment Agreement, dated March 5, 2024, by and between Patrick Industries, Inc.

and Andrew C.

Roeder (filed as Exhibit 10.1 to the Company's Form 8-K filed on March 5, 2024 and incorporated herein by reference)

19.1** Insider Trading Policy

21** Subsidiaries of the Registrant.

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**Filed herewith.

***Management contract or compensatory plan or arrangement and filed herewith.

All other financial statement schedules are omitted because they are not applicable or the required information is immaterial or is shown in the Notes to Consolidated Financial Statements.

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Signature Title Date

Nemeth Chief Executive Officer February 29, 2024

Nemeth (Principal Executive Officer)

Nemeth Chairman of the Board February 20, 2025

Nemeth Chief Executive Officer

(Principal Executive Officer)

/s/ Andrew C.

Executive Vice President - Finance, February 20, 2025

Roeder Chief Financial Officer, and Treasurer

(Principal Financial Officer)

/s/ Matthew S.

Filer Interim Executive Vice President Finance, February 29, 2024

Filer Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)

Filer Senior Vice President - Finance, February 20, 2025

Filer Chief Accounting Officer

(Principal Accounting Officer)

/s/ Joseph M.

Cerulli Director February 20, 2025

Cleveland Chairman of the Board February 29, 2024

Forbes Director February 29, 2024

Cleveland Director February 20, 2025

Forbes Lead Independent Director February 20, 2025

/s/ Michael A.

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Suggs Director February 20, 2025

Scott Welch Lead Independent Director February 29, 2024

Scott Welch Director February 20, 2025

PATRICK INDUSTRIES, INC.

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Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

As described in the accompanying Management's Annual Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at the operations of businesses acquired in 2024, which are described in Note 3, whose financial statements constitute less than 8% of consolidated net sales for the year ended December 31, 2024 and approximately 3% of consolidated total assets as of December 31, 2024.

Accordingly, our audit did not include the internal control over financial reporting at these businesses.

Basis for Opinions

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A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill – Fiberglass Reporting Unit – Refer to Notes 1 and 6 to the Financial Statements

Acquisitions - Sportech - Customer Relationships and Trademark Intangible Assets - Refer to Note 3 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value.

When calculating the present value of future cash flows under the income approach, the Company takes into consideration forecasted sales volumes, operating income, and a discount rate.

The Company uses a market approach as a secondary valuation method to evaluate the income approach.

The market approach includes a comparison of multiples of earnings before interest, taxes, depreciation, and amortization (EBITDA) for the reporting unit to similar businesses or guideline companies whose securities are actively traded in public markets.

The estimated fair value of the Company’s reporting unit was determined to exceed the carrying value for the year end December 31, 2023, and so no impairment was recognized.

We identified goodwill for the Fiberglass Reporting Unit as a critical audit matter because of the significant judgments made by management to estimate the fair value of the Fiberglass Reporting Unit and the difference between its fair value and carrying value.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to selection of the discount rate and forecasts of future revenue and operating margin, specifically due to the sensitivity of the Fiberglass Reporting Unit’s operations.

The Company completed the acquisition of Sportech for approximately $319 million in January 2024.

The Company accounted for the acquisition under the acquisition method of accounting for business combinations.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including a customer relationships intangible asset and a trademark intangible asset of $152 million and $21 million, respectively.

Management estimated the fair value of the customer relationships intangible asset using the multi-period excess earnings method and the fair value of the trademark intangible asset using the relief-from-royalty method, both such methods being specific discounted cash flow methods.

The fair value determination of these intangible assets required management to make significant estimates and assumptions related to future cash flows, specifically revenue growth and profit margins, and the selection of the discount rates and, specifically for the trademark intangible asset, the selection of the royalty rate.

We identified these intangible assets for Sportech as a critical audit matter because of the significant estimates and assumptions management made to fair value these assets.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s valuation methodologies, forecasts of future cash flows, specifically revenue growth and profit margins, and the selection of the discount rates and, for the trademark intangible asset, the royalty rate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the discount rate and forecasts of sales and operating income used by management to estimate the fair value of certain reporting units included the following, among others:

• We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the Fiberglass Reporting Unit related to management’s selection of the discount rates and forecasts of sales and operating income.

• We evaluated management’s ability to accurately forecast sales and operating income by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s sales and operating income assumptions included in the income approach model, and the extent to which forecast projection risk had been contemplated in the selection of the discount rate by comparing the forecasts to historical sales and operating income.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology and discount rate by testing the source information underlying the determination of the discount rate, the mathematical accuracy of the calculations and developing a range of independent estimates and comparing those to the discount rate selected by management.

Our audit procedures related to the valuation methodologies, the forecasts of future cash flows, specifically revenue growth and profit margins, and the selection of the discount rates and trademark intangible asset royalty rate included the following, among others:

• We tested the effectiveness of controls over the valuation of the customer relationships and trademark intangible assets, including management’s controls over the valuation methodologies, forecasts of future cash flows, specifically revenue growth and profit margins, and selection of the discount rates and trademark intangible asset royalty rate.

• We assessed the reasonableness of management’s forecast of future cash flows, specifically revenue growth and profit margins, by comparing the projections to historical results and certain peer companies.

• With the assistance of our internal fair value specialists, we evaluated the reasonableness of the valuation methodologies, discount rates, and trademark intangible asset royalty rate by:

◦ Assessing whether the selected valuation methodologies align with generally accepted valuation methodologies.

◦ Testing the source information underlying the determination of the discount rates and trademark intangible asset royalty rate.

◦ Testing the mathematical accuracy of the calculations.

◦ Developing ranges of independent estimates and comparing those to the rates selected by management.

/s/ Deloitte & Touche LLP

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CONSOLIDATED STATEMENTS OF INCOME

($ in thousands except per share data) Year Ended December 31,

2023 2022 2021

Year Ended December 31,

($ in thousands, except per share data) 2024 2023 2022

NET SALES $ 3,715,683 $ 3,468,045 $ 4,881,872

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BASIC EARNINGS PER COMMON SHARE (1)

$ 4.25 $ 4.43 $ 9.88

DILUTED EARNINGS PER COMMON SHARE (1)

$ 4.11 $ 4.33 $ 8.99

Weighted average shares outstanding - Basic (1)

32,568 32,278 33,210

Weighted average shares outstanding - Diluted (1)

33,699 33,038 36,707

(1) Prior year periods reflect the impact of the three-for-two stock split paid on December 13, 2024.

See Note 1 "Basis of Presentation and Significant Accounting Policies" for further details.

See accompanying Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

($ in thousands) Year Ended December 31,

2023 2022 2021

Year Ended December 31,

($ in thousands) 2024 2023 2022

NET INCOME $ 138,401 $ 142,897 $ 328,196

1 unchanged sentence

Change in unrealized gain on hedge derivatives — — 757

Foreign currency translation gain (loss) ( 75 ) ( 97 ) 142

Foreign currency translation loss ( 40 ) ( 75 ) ( 97 )

Other 113 ( 229 ) 873

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CONSOLIDATED BALANCE SHEETS

($ in thousands except share data) 2023 2022

($ in thousands) 2024 2023

Current Assets:

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none issued or outstanding

Common stock, no par value;

authorized 40,000,000 shares;

issued and outstanding 2023 - 22,160,608 shares;

issued and outstanding 2022 - 22,212,360 shares

Common stock, no par value, 40,000,000 shares authorized, 33,567,048 and 33,240,912 issued and outstanding as of December 31, 2024 and 2023, respectively (1)

202,353 203,258

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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 3,020,954 $ 2,562,448

(1) The prior year period reflects the impact of the three-for-two stock split paid on December 13, 2024.

See Note 1 "Basis of Presentation and Significant Accounting Policies" for further details.

See accompanying Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands) Year Ended December 31,

2023 2022 2021

Year Ended December 31,

($ in thousands) 2024 2023 2022

CASH FLOWS FROM OPERATING ACTIVITIES

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Depreciation and amortization 166,545 144,543 130,757

Amortization of convertible notes debt discount 1,072 1,851 7,987

Amortization of deferred debt financing costs 3,270 3,239 3,892

Stock-based compensation expense 16,775 19,429 21,751

1 unchanged sentence

(Gain) loss on sale of property, plant and equipment ( 237 ) 585 ( 5,560 )

Loss on extinguishment of debt 2,549 — —

Other 376 ( 325 ) 2,744

Change in operating assets and liabilities, net of acquisitions of businesses:

Change in operating assets and liabilities, net of business acquisitions:

Trade and other receivables, net 10,847 8,923 26,056

5 unchanged sentences

Purchases of property, plant, and equipment ( 75,682 ) ( 58,987 ) ( 79,883 )

Proceeds from sale of property, equipment, facility and other 1,362 7,620 197

Proceeds from sale of property, plant, and equipment 2,411 1,362 7,620

Business acquisitions, net of cash acquired ( 411,747 ) ( 25,859 ) ( 248,899 )

6 unchanged sentences

Repayments on revolver ( 1,220,385 ) ( 568,728 ) ( 894,147 )

Repayments of convertible notes ( 172,500 ) — —

Repayment of convertible notes — ( 172,500 ) —

Proceeds from senior notes offering 500,000 — —

Proceeds from convertible notes offering — — 258,750

Purchase of convertible notes hedges — — ( 57,443 )

Proceeds from sale of warrants — — 43,677

Repayment of senior notes ( 300,000 ) — —

Cash dividends paid to shareholders ( 50,187 ) ( 42,140 ) ( 32,869 )

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Proceeds from exercise of common stock options

1,413 195 4,950

Other financing activities 123 ( 150 ) —

Net cash (used in) provided by financing activities ( 333,565 ) ( 190,273 ) 400,686

(Decrease) increase in cash and cash equivalents ( 11,438 ) ( 100,002 ) 78,082

Net cash provided by (used in) financing activities 208,160 ( 333,565 ) ( 190,273 )

Net increase (decrease) in cash and cash equivalents 22,152 ( 11,438 ) ( 100,002 )

Cash and cash equivalents at beginning of year 11,409 22,847 122,849

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

($ in thousands, except share data) Common

($ in thousands) Common

Stock Additional

1 unchanged sentence

Comprehensive

Income (Loss) Treasury Stock Retained

Income (Loss) Retained

Earnings Total

Balance January 1, 2021 $ 180,892 $ 24,387 $ ( 6,052 ) $ — $ 360,214 $ 559,441

Balance at January 1, 2022 $ 196,383 $ 59,668 $ ( 2,228 ) $ 513,734 $ 767,557

Impact of adoption of ASU 2020-06 — ( 59,668 ) — 15,975 ( 43,693 )

Net income — — — 328,196 328,196

Dividends declared — — — ( 33,160 ) ( 33,160 )

Other comprehensive loss, net of tax — — 3,824 — — 3,824

Stock repurchases under buyback program ( 2,729 ) ( 368 ) — ( 21,550 ) ( 24,293 ) ( 48,940 )

Retirement of treasury stock ( 2,013 ) ( 271 ) — 21,550 ( 19,266 ) —

Other comprehensive income, net of tax — — 1,533 — 1,533

Share repurchases under buyback program ( 11,099 ) — — ( 65,884 ) ( 76,983 )

Issuance of shares upon exercise of common stock options 195 — — — 195

Issuance of shares in connection with a business combination 10,211 — — — — 10,211

Repurchase of shares for tax payments related to the vesting and exercise of share-based grants ( 10,227 ) — — — ( 10,227 )

Stock-based compensation expense 21,751 — — — 21,751

Purchase of convertible notes hedges, net of tax of $ 14,556

— ( 42,887 ) — — — ( 42,887 )

Proceeds from sale of warrants — 43,677 — — — 43,677

Equity component of convertible note issuance, net of tax of $ 11,923

— 35,130 — — — 35,130

Balance December 31, 2021 $ 196,383 $ 59,668 $ ( 2,228 ) $ — $ 513,734 $ 767,557

Impact of adoption of ASU 2020-06 — ( 59,668 ) — — 15,975 ( 43,693 )

Balance at December 31, 2022 $ 197,003 $ — $ ( 695 ) $ 758,861 $ 955,169

Net income — — — 142,897 142,897

Dividends declared — — — ( 42,327 ) ( 42,327 )

Other comprehensive income, net of tax — — 1,533 — — 1,533

Other comprehensive loss, net of tax — — ( 304 ) — ( 304 )

Share repurchases under buyback program ( 2,455 ) — — ( 16,353 ) ( 18,808 )

2 unchanged sentences

Stock-based compensation expense 19,429 — — — 19,429

Balance December 31, 2022 $ 197,003 $ — $ ( 695 ) $ — $ 758,861 $ 955,169

Balance at December 31, 2023 $ 203,258 $ — $ ( 999 ) $ 843,078 $ 1,045,337

Net income — — — 138,401 138,401

1 unchanged sentence

Other comprehensive income, net of tax — — 73 — 73

Share repurchases under buyback program ( 2,455 ) — — — ( 16,353 ) ( 18,808 )

Stock repurchases under buyback program ( 367 ) — — ( 4,294 ) ( 4,661 )

Issuance of shares upon exercise of common stock options 21 — — — 21

1 unchanged sentence

Stock-based compensation expense 16,775 — — — 16,775

Balance December 31, 2023 $ 203,258 $ — $ ( 999 ) $ — $ 843,078 $ 1,045,337

Balance at December 31, 2024 $ 202,353 $ — $ ( 926 ) $ 926,939 $ 1,128,366

See accompanying Notes to Consolidated Financial Statements.

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Patrick Industries, Inc.

(“Patrick” or the “Company”) operations consist of the manufacture and distribution of component products and materials for use primarily by the recreational vehicle (“RV”), marine, manufactured housing (“MH”) and industrial markets for customers throughout the United States and Canada.

As of December 31, 2023, the Company maintained 179 manufacturing plants and 62 distribution facilities located in 23 states with a small presence in Mexico, China and Canada.

(“Patrick” or the “Company”) operations consist of the manufacture and distribution of component products and materials for use primarily by the recreational vehicle (“RV”), marine, powersports, manufactured housing (“MH”) and industrial markets for customers throughout the United States and Canada.

As of December 31, 2024, the Company maintained approximately 179 manufacturing plants and 47 distribution facilities located in 25 states with a small presence in Mexico, China and Canada.

Patrick operates in two business segments:

Manufacturing and Distribution.

Reclassified Amounts

Certain amounts have been reclassified in prior years' financial statements to conform with current year presentation.

These reclassifications are immaterial to the overall financial statements.

Previously, our sales to the powersports end market were included in the Company’s marine end market sales.

Effective with the first quarter of 2024, powersports net sales are being reported separately after the January 2024 acquisition of Sportech, LLC, as disclosed in Note 2 "Revenue Recognition".

Principles of Consolidation

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GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

Estimates include the valuation of goodwill and indefinite-lived intangible assets, the valuation of long-lived assets, the allowance for doubtful accounts, excess and obsolete inventories, assets acquired and liabilities assumed in a business combination, the valuation of estimated contingent consideration, deferred tax asset valuation allowances, and certain accrued liabilities.

Estimates include the valuation of goodwill and indefinite-lived intangible assets, the valuation of long-lived assets, the allowance for credit losses, excess and obsolete inventories, assets acquired and liabilities assumed in a business combination, the valuation of estimated contingent consideration, deferred tax asset valuation allowances, and certain accrued liabilities.

Actual results could differ from the amounts reported.

Revenue Recognition

The Company is a major manufacturer and distributor of component products and materials serving original equipment manufacturers and other customers in the RV, marine, MH, and industrial industries.

The Company is a major manufacturer and distributor of component products and materials serving original equipment manufacturers and other customers in the RV, marine, powersports, MH, and industrial industries.

Revenue is recognized when or as control of the promised goods transfers to the Company's customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.

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The transaction price for contracts may include reductions to the transaction price for estimated volume discounts and rebates and other customer incentives.

There are no material instances in any period presented where variable consideration was constrained and not recorded at the initial time of sale.

Manufacturing segment revenue is recognized when control of the products transfers to the customer which is the point when the customer gains the ability to direct the use of and obtain substantially all the remaining benefits from the asset, which is generally upon delivery of goods, or upon shipment of goods in certain circumstances.

In limited circumstances, where the products are customer specific with no alternative use to the Company, and the Company has a legally enforceable right to payment for performance to date with a reasonable margin, revenue is recognized over the contract term based on the cost-to-cost method.

However, the financial impact of these contracts is immaterial considering the short production cycles and limited inventory days on hand.

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(ii) our obligation to pay the vendor irrespective of our ability to collect from the customer;

(iii) our discretion in

determining the price of the good provided to the customer;

(iii) our discretion in determining the price of the good provided to the customer;

(iv) our title to the goods before the customer receives or accept the goods;

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Contract liabilities, representing upfront payments from customers received prior to satisfying performance obligations, were immaterial in all periods presented and changes in contract liabilities were immaterial in all periods presented.

Contract assets, representing the Company’s rights to consideration for work completed but not billed (generally in conjunction with contracts for which revenue is recognized over time), were immaterial in all periods presented.

Costs and Expenses

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The risk free interest rate is based on the U.S.

Trea sury yield curve in effect at the time of grant for instruments of a similar term.

Trea sury yield curve in effect at the time

of grant for instruments of a similar term.

New shares are issued upon exercise of options.

2 unchanged sentences

Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding.

Diluted earnings per common share is computed by dividing net income available for diluted shares (calculated as net income plus the after-tax effect of interest on potentially dilutive convertible notes, as defined by Accounting Standards Update ("ASU") 2020-06, as adopted in 2022) by the weighted-average number of common shares outstanding, plus the weighted-average impact of potentially dilutive convertible notes as defined by ASU 2020-06, plus the dilutive effect of stock options, SARS, and certain restricted stock awards (collectively, “Common Stock Equivalents”).

Diluted earnings per common share is computed by dividing net income available for diluted shares (calculated as net income plus the after-tax effect of interest on potentially dilutive convertible notes, where applicable) by the weighted-average number of common shares outstanding, plus the weighted-average impact of potentially dilutive convertible notes, plus the dilutive effect of stock options, SARS, and certain restricted stock awards (collectively, “Common Stock Equivalents”).

The dilutive effect of Common Stock Equivalents is calculated under the treasury stock method using the average market price for the period.

Common Stock Equivalents are not included in the computation of diluted earnings per common share if their effect would

be anti-dilutive.

Common Stock Equivalents are not included in the computation of diluted earnings per common share if their effect would be anti-dilutive.

On November 18, 2024, the Board of Directors declared a three-for-two stock split of the Company's common stock, to be effected in the form of a stock dividend.

Shareholders of record as of the close of business on November 29, 2024 received one additional share for every two shares held which was paid on December 13, 2024.

The Company's stock began trading on a post-split basis on December 16, 2024.

Cash paid in lieu of fractional shares was immaterial.

All share and per share information has been updated on a retrospective basis for all periods presented .

See Note 13 "Earnings Per Common Share" for the calculation of both basic and diluted earnings per common share.

1 unchanged sentence

The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents.

The Company held no cash equivalents as of December 31, 2024 and 2023, respectively.

Trade and Other Receivables

6 unchanged sentences

Other receivables 32,768 31,046

Allowance for doubtful accounts ( 4,004 ) ( 2,198 )

Allowance for credit losses ( 3,708 ) ( 4,004 )

Total $ 178,206 $ 163,838

13 unchanged sentences

Property, Plant and Equipment

Property, plant and equipment (“PP&E”) is generally recorded at cost.

Depreciation is computed primarily by the straight-line method applied to individual items based on estimated useful lives, which is as follows for 2023:

Asset Class Estimated life (years)

Buildings and improvements 10 - 30

Leasehold improvements 10

Capitalized software 3 - 5

Machinery and equipment and transportation equipment 3 - 7

The costs of major improvements that materially extend the useful life of property are capitalized.

Expenditures for repairs and maintenance are charged to expense as incurred.

Depreciation is determined based on a straight-line method over the assets' estimated useful lives.

Leasehold improvements are amortized over the lesser of their useful lives or the related lease term.

The recoverability of PP&E is evaluated whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable, primarily based on estimated selling price, appraised value or projected future cash flows.

Goodwill and Intangible Assets

1 unchanged sentence

The Company reviews goodwill and indefinite-lived intangible assets for impairment in the fourth quarter, or more frequently, if events or changes in circumstances indicate the assets might be impaired.

The impairment test was performed on October 1, 2023.

In conducting its impairment testing, the Company estimates the fair value of our reporting units using both an income and market based approach.

The impairment test was performed on September 30, 2024.

In conducting its impairment testing, the Company estimates the fair value of our reporting units using both an income and market based approach and the fair value of our indefinite-lived intangible assets using an income based approach.

The market approach includes a comparison of multiples of earnings before interest, taxes, depreciation and amortization for the reporting units to similar businesses or guideline companies whose securities are actively traded in public markets.

The income approach calculates the present value of expected cash flows to determine the estimated fair value of our reporting units.

The income approach calculates the present value of expected cash flows to determine the estimated fair value of our reporting units or indefinite-lived intangible assets.

Additionally, the income approach requires us to estimate future cash flows, the timing of these cash flows, and a discount rate (based on a weighted average cost of capital), which represents the time value of money and the inherent risk and uncertainty of the future cash flows.

Estimated royalty rates applied to projected revenues are based on comparable industry studies and consideration of operating margins.

The assumptions we use to estimate future cash flows are consistent with the assumptions that our reporting units use for internal planning purposes.

When calculating the present value of future cash flows under the income approach, we take into consideration multiple variables, including forecasted sales volumes and operating income, current industry and economic conditions, and historical results.

If we determine that the estimated fair value of each reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired.

If we determine that the estimated fair value of each reporting unit or indefinite-lived intangible asset exceeds its carrying amount, the reporting unit's goodwill or indefinite-lived intangible asset is not impaired.

Our fourth quarter 2024 goodwill impairment test concluded that the fair values of each of our reporting units exceeded their carrying values.

Our 2023 indefinite-lived intangibles test also concluded that the fair values of intangibles exceeded their respective carrying values.

Impairment of Long-Lived Assets

When events or conditions warrant, the Company evaluates the recoverability of long-lived assets other than goodwill and indefinite-lived intangible assets and considers whether these assets are impaired.

Our 2024 indefinite-lived intangibles test also concluded that the fair values of these intangibles exceeded their respective carrying values.

Long-Lived Assets

When events or conditions warrant, the Company evaluates the recoverability of long-lived assets other than goodwill and indefinite-lived intangible assets, which includes property, plant and equipment, finite-lived intangible assets, and lease right-of-use assets, and considers whether these assets are impaired.

The Company assesses the recoverability of these assets based upon several factors, including management's intention with respect to the assets and their projected future undiscounted cash flows.

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A significant adverse change in the Company’s business climate in future periods could result in a significant loss of market share or the inability to achieve previously projected revenue growth and could lead to a required assessment of the recoverability of the Company’s long-lived assets, which may subsequently result in an impairment charge.

Finite-lived intangible assets are amortized over their useful lives, as detailed further in Note 6 "Goodwill and Intangible Assets", and are also subject to an impairment test based on estimated undiscounted cash flows when impairment indicators exist.

Fair Value and Financial Instruments

The Company accounts for certain assets and liabilities at fair value.

The fair values are separated into three broad levels (Levels 1, 2 and 3) based on the assessment of the availability of observable market data and the significance of non-observable data used to determine fair value.

Each fair value measurement must be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety.

The three levels are as follows:

• Level 1 inputs, which are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 inputs, which are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability.

• Level 3 inputs, which are unobservable inputs for the asset or liability.

These unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances (which might include the reporting entity’s own data).

As of December 31

($ in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Cash equivalents (1)

$ 6.1 $ — $ — $ 15.2 $ — $ —

7.50 % senior notes due 2027 (2)

$ — $ 303.7 $ — $ — $ 293.9 $ —

4.75 % senior notes due 2029 (2)

$ — $ 320.2 $ — $ — $ 293.8 $ —

1.00 % convertible notes due 2023 (2)

$ — $ — $ — $ — $ 172.0 $ —

1.75 % convertible notes due 2028 (2)

$ — $ 295.2 $ — $ — $ 219.9 $ —

Term loan due 2027 (3)

$ — $ 129.4 $ — $ — $ 136.9 $ —

Revolver due 2027 (3)

$ — $ — $ — $ — $ 80.3 $ —

Contingent consideration (4)

$ — $ — $ 8.5 $ — $ — $ 9.2

(1) The carrying amounts of cash equivalents, representing government and other money market funds traded in an active market with relatively short maturities, are reported on the consolidated balance sheet as of December 31, 2023 as a component of "Cash and cash equivalents".

(2) The amounts of these notes listed above are the fair values for disclosure purposes only, and they are recorded in the Company's consolidated balance sheets as of December 31, 2023 and 2022 using the interest rate method.

(3) The carrying amounts of our term loan and revolving credit facility approximate fair value as of December 31, 2023 and 2022 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.

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

Finite-lived intangible assets are amortized on a straight-line basis over their useful lives, as detailed further in Note 6 "Goodwill and Intangible Assets".

Income tax expense is calculated based on statutory tax rates of the federal, state, and international jurisdictions in which the Company operates and income earned or apportioned to each of these respective jurisdictions, as well as any additional tax planning available to the Company in these jurisdictions.

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The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

The Company determines whether an arrangement is a lease at inception.

For leases where the Company is the lessee, a lease liability and a right-of-use asset are recognized for all leases, with the exception of short-term leases with terms of twelve months or less.

The lease liability represents the lessee’s obligation to make lease payments arising from a lease, and is measured as the present value of the lease payments.

As the rate implicit in the lease is usually not known at lease commencement, the Company uses its incremental borrowing rate to discount the lease obligation.

The Company uses its best judgment when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency.

The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and is measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the Company’s initial direct costs.

Additionally, the Company has lease agreements containing lease and non-lease components which are accounted for as a single lease component.

See Note 14 "Leases" for additional information.

Recently Issued Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

In October 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-06, "Disclosure Improvements." The amendments in this update modify the disclosure or presentation requirements of a variety of topics in the codification.

Certain of the amendments represent clarifications to or technical corrections of the current requirements.

The amendments in this ASU are effective for public business entities for interim periods beginning after June 30, 2027.

The Company is currently evaluating the impacts of the provisions of ASU 2023-06.

In November 2023, the FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures".

Adoption of New Accounting Standards

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 , “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures" .

This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.

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Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is also permitted.

This ASU will

likely result in additional required disclosures when adopted.

The Company is currently evaluating this guidance to determine the impact on its disclosures;

however, adoption will not impact our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures" .

The Company adopted the ASU during the year ended December 31, 2024 and applied the requirements for the fiscal year ended December 31, 2024 on a retrospective basis to all periods presented.

The Company will begin to apply the disclosure requirements in interim periods beginning in 2025.

The adoption of this guidance did not have a significant impact on Patrick’s consolidated financial statements.

See Note 17 "Segment Reporting" for further detail.

Accounting Standards Not Yet Adopted

In November 2024, the FASB" issued ASU 2024-03 , "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses".

The amendments in this update require public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items in the notes to the financial statements.

Public business entities are required to apply the guidance prospectively or retrospectively.

This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is

currently evaluating the effects that the adoption of ASU 2024-03 will have on the Company's consolidated financial statements.

In November 2024, the FASB issued ASU 2024-04 , "Debt - Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments".

The amendments in this update are intended to clarify disclosure requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions rather than as debt extinguishments.

This ASU is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years.

Early adoption is permitted.

The Company is currently evaluating the effects that the adoption of ASU 2024-04 will have on the Company's consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, " Income Taxes (Topic 740):

Improvements to Income Tax Disclosures".

This ASU establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements.

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REVENUE RECOGNITION

In the following table, revenue from contracts with customers, net of intersegment sales, is disaggregated by market type and by reportable segment, consistent with how the Company believes the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors:

In the following table, revenue from contracts with customers, is disaggregated by market type and by reportable segment, consistent with how the Company believes the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors:

Year Ended December 31, 2024

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Marine 530,828 39,896 570,724

Powersports 338,904 13,329 352,233

Manufactured Housing 300,689 381,401 682,090

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Marine 743,826 38,749 782,575

Powersports 109,362 12,592 121,954

Manufactured Housing 258,551 309,659 568,210

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Marine 868,996 44,515 913,511

Powersports 89,977 13,024 103,001

Manufactured Housing 344,983 359,618 704,601

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Business combinations generally take place to strengthen Patrick's positions in existing markets and increase its market share and per unit content, expand into additional markets, or gain key technology.

Acquisitions are accounted for under the acquisition method of accounting.

For each acquisition, the excess of the purchase consideration over the fair value of the net

assets acquired is recorded as goodwill, which generally represents the combined value of the Company’s existing purchasing, manufacturing, sales, and systems resources with the organizational talent and expertise of the acquired companies’ respective management teams to maximize efficiencies, market share growth and net income.

The Company completed the acquisitions discussed below during the years ended December 31, 2023, 2022 and 2021.

The acquisitions were funded through cash on hand, issuance of shares, or borrowings under the Company’s credit facility in existence at the time of acquisition.

Acquisitions meeting the definition of a business combination are accounted for under the acquisition method of accounting.

For each acquisition, the excess of the purchase consideration over the fair value of the net assets acquired is recorded as goodwill, which generally represents the combined value of the Company’s existing purchasing, manufacturing, sales, and systems resources with the organizational talent and expertise of the acquired companies’ respective management teams to maximize efficiencies, market share growth and net income.

The Company completed the acquisitions representing business combinations discussed below during the years ended December 31, 2024, 2023 and 2022.

The acquisitions were funded through cash on hand or borrowings under the Company’s credit facility in existence at the time of acquisition.

For each of the acquisitions discussed, we either acquired the assets and assumed the liabilities of the business, or acquired 100 % of the equity interests.

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For the years ended December 31, 2024, 2023 and 2022, operating income of approximately $ 47.2 million, $ 1.0 million and $ 19.4 million, respectively, was included in the Company’s consolidated statements of income pertaining to the businesses acquired in each such respective year.

Acquisition-related costs associated with the businesses acquired in 2024 were $ 5.0 million.

Acquisition-related costs associated with the businesses acquired in 2023 and 2022 were immaterial in each respective year.

Contingent Consideration

In connection with certain acquisitions, if certain financial results for the acquired businesses are achieved, the Company is required to pay additional cash consideration.

The Company records a liability for the 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.

In connection with certain acquisitions, the Company is required to pay additional cash consideration to the sellers 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.

The following table provides a reconciliation of the beginning and ending aggregate fair values of the contingent consideration:

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($ in thousands) 2024 2023

Beginning fair value - contingent consideration $ 9,213 $ 12,275

Balance at January 1 $ 8,510 $ 9,213

Additions 2,030 3,590

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Settlements ( 5,032 ) ( 5,210 )

Ending fair value - contingent consideration $ 8,510 $ 9,213

Balance at December 31 $ 3,608 $ 8,510

The following table shows the balance sheet location of the fair value of contingent consideration and the maximum amount of contingent consideration payments the Company may be subject to:

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2024 Acquisitions

The Company completed seven 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 five acquisitions not discussed above, total cash consideration for the 2024 Acquisitions was approximately $ 411.7 million, plus working capital holdbacks and contingent consideration over a three-year period based on future performance in connection with certain acquisitions.

The preliminary purchase price allocations are subject to valuation activities being finalized, and thus certain purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its estimates.

Changes to preliminary purchase accounting estimates recorded in 2024 related to the 2024 Acquisitions were immaterial.

2023 Acquisitions

The Company completed three acquisitions in the year ended December 31, 2023, including the following previously announced acquisition (collectively, the "2023 Acquisitions"):

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Inclusive of two acquisitions not discussed above, total cash consideration for the 2023 Acquisitions was approximately $ 26.3 million, plus contingent consideration over a two-year period based on future performance in connection with certain acquisitions.

Changes to preliminary purchase accounting estimates recorded in 2023 related to the 2023 Acquisitions were immaterial.

Purchase price allocations and all valuation activities in connection with the 2023 Acquisitions have been finalized.

Changes to preliminary purchase accounting estimates recorded in 2024 related to the 2023 Acquisitions were immaterial and relate primarily to the valuation of intangible and fixed assets.

2022 Acquisitions

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Purchase price allocations and all valuation activities in connection with the 2022 Acquisitions have been finalized.

Changes to preliminary purchase accounting estimates recorded in 2023 related to the 2022 Acquisitions were immaterial and relate primarily to the valuation of intangible and fixed assets.

2021 Acquisitions

The Company completed thirteen acquisitions in the year ended December 31, 2021, including the following seven previously announced acquisitions (collectively, the "2021 Acquisitions"):

Company Segment Description

Sea-Dog Corporation & Sea-Lect Plastics (collectively, "Sea-Dog") Distribution & Manufacturing Distributor of a variety of marine and powersports hardware and accessories to distributors, wholesalers, retailers, and manufacturers and provider of plastic injection molding, design, product development and expert tooling to companies and government entities, based in Everett, Washington, acquired in March 2021.

Hyperform, Inc.

Manufacturing Manufacturer of high-quality, non-slip foam flooring, operating under the SeaDek® brand name, for the marine OEM market and aftermarket as well as serving the pool and spa, powersports and utility markets under the SwimDek and EndeavorDek brand names, with manufacturing facilities in Rockledge, Florida and Cocoa, Florida, acquired in April 2021.

Alpha Systems, LLC Manufacturing & Distribution Manufacturer and distributor of component products and accessories for the RV, marine, manufactured housing and industrial end markets that includes adhesives, sealants, rubber roofing, roto/blow molding and injection molding products, flooring, insulation, shutters, skylights, and various other products and accessories, operating out of nine facilities in Elkhart, Indiana, acquired in May 2021.

Coyote Manufacturing Company Manufacturing Designer, fabricator, and manufacturer of a variety of steel and aluminum products, including boat trailers, towers, T-tops, leaning posts, and other custom components primarily for the marine OEM market, based in Nashville, Georgia, acquired in August 2021.

Tumacs Covers Manufacturing Manufacturer of custom designed boat covers, canvas frames, and bimini tops, primarily serving large marine OEMs and dealers, headquartered in Pittsburgh, Pennsylvania, with manufacturing facilities in Indiana and Pennsylvania, and a distribution/service center in Michigan, acquired in August 2021.

Wet Sounds, Inc.

& Katalyst Industries LLC (collectively "Wet Sounds") Manufacturing Designer, engineer, and fabricator of innovative audio systems and accessories, including amplifiers, tower speakers, soundbars, and subwoofers sold directly to OEMs and consumers, and to dealers and retailers, primarily within the marine market as well as to the home audio and powersports markets and aftermarkets, based in Rosenburg, Texas, acquired in November 2021.

Williamsburg Marine LLC & Williamsburg Furniture, Inc.

(collectively "Williamsburg") Manufacturing Manufacturer of seating for the RV and marine end markets sold primarily to OEMs, based in Milford and Nappanee, Indiana, acquired in November 2021.

Inclusive of six acquisitions not discussed above, total cash consideration for the 2021 Acquisitions was approximately $ 509.1 million, plus contingent consideration over a one to three-year period based on future performance in connection with certain acquisitions.

Purchase price allocations and all valuation activities in connection with the 2021 Acquisitions have been finalized .

Pro Forma Information (Unaudited)

The following pro forma information assumes the 2024 Acquisitions and 2023 Acquisitions occurred as of the beginning of the year immediately preceding each such acquisition.

The pro forma information contains the actual operating results of each of the 2024 Acquisitions and 2023 Acquisitions, combined with the results prior to their respective acquisition dates, adjusted to reflect the pro forma impact of the acquisitions occurring as of the beginning of the year immediately preceding each such acquisition.

The pro forma information includes financing and interest expense charges based on the actual incremental borrowings incurred in connection with each transaction as if it occurred as of the beginning of the year immediately preceding each such acquisition.

In addition, the pro forma information includes incremental amortization expense, net of tax related to intangible assets acquired of $ 3.7 million and $ 14.9 million for the years ended December 31, 2024 and 2023, respectively, in connection with the acquisitions as if they occurred as of the beginning of the year immediately preceding each such acquisition.

Year Ended December 31,

($ in thousands, except per share data) 2024 2023

Net sales $ 3,801,996 $ 3,841,655

Net income $ 145,102 $ 152,117

Basic earnings per common share (1)

$ 4.46 $ 4.71

Diluted earnings per common share (1)

$ 4.31 $ 4.60

(1) The prior year period reflects the impact of the three-for-two stock split paid on December 13, 2024.

See Note 1 "Basis of Presentation and Significant Accounting Policies" for further details.

The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time, nor is it intended to be a projection of future results.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the date of the acquisition for 2024, 2023, and 2022 Acquisitions:

2024 Acquisitions 2023 Acquisitions 2022 Acquisitions

($ in thousands) Acquisition A Acquisition B All Others Total

($ in thousands) Sportech All Others Total Acquisition A Acquisition B All Others Total

Consideration:

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Working capital holdback and other, net — 4,201 4,201 — — — — —

( 26 ) — — — — —

Common stock issuance (2)

— — — — — 10,211

Contingent consideration (1)

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$ 319,073 $ 98,862 $ 417,935 $ 27,894 $ 132,557 $ 94,705 $ 22,664 $ 249,926

$ 29,790 $ 132,557 $ 94,705 $ 22,664 $ 249,926 $ 524,005

(1) Certain acquisitions contain working capital holdbacks which are typically settled in a 90 -day period following the close of the acquisition.

This value represents the remaining amounts due to (from) sellers as of December 31, 2023.

(2) In connection with one of the 2021 Acquisitions, the Company issued 113,961 shares of common stock at a closing price of $ 89.60 as of the acquisition date.

Further detail of the 2021 Acquisitions can be found in the 2022 Form 10-K filed with the SEC on February 24, 2023.

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

(4) Goodwill is tax-deductible for the 2023 Acquisitions, for the 2022 Acquisitions, except Acquisition A and Acquisition B (totaling approximately $ 74.9 million), and for the 2021 Acquisitions, except Tumacs Covers (approximately $ 6.2 million).

(5) In connection with one of the 2023 Acquisitions, the Company recognized a $ 1.7 million bargain purchase gain.

A bargain purchase gain is recognized when the net assets acquired in a business combination have a higher fair value than the consideration paid.

This gain is primarily attributable to the fair value assigned to customer relationships in that acquisition and is included in "Selling, general and administrative" in the consolidated statement of income for the year ended December 31, 2023.

(2) Goodwill is tax-deductible for the 2024 Acquisitions, except for Sportech which is only partially tax-deductible, for the 2023 Acquisitions, and for the 2022 Acquisitions, except Acquisition A and Acquisition B (totaling approximately $ 74.9 million).

We estimate the value of acquired property, plant, and equipment using a combination of the income, cost, and market approaches, such as estimates of future income growth, capitalization rates, discount rates, and capital expenditure needs of the acquired businesses.

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Trademarks have an indefinite useful life.

Pro Forma Information (Unaudited)

The following pro forma information assumes the 2023 Acquisitions and 2022 Acquisitions occurred as of the beginning of the year immediately preceding each such acquisition.

The pro forma information contains the actual operating results of each of the 2023 Acquisitions and 2022 Acquisitions, combined with the results prior to their respective acquisition dates, adjusted to reflect the pro forma impact of the acquisitions occurring as of the beginning of the year immediately preceding each such acquisition.

In addition, the pro forma information includes incremental amortization expense related to intangible assets acquired of $ 0.4 million and $ 5.6 million for the years ended December 31, 2023 and 2022, respectively, in connection with the acquisitions as if they occurred as of the beginning of the year immediately preceding each such acquisition.

Year Ended December 31

($ in thousands except per share data) 2023 2022

Net sales $ 3,483,940 $ 4,994,679

Net income $ 143,693 $ 333,835

Basic earnings per common share 6.68 15.07

Diluted earnings per common share 6.53 13.72

As of December 31,

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PROPERTY, PLANT AND EQUIPMENT

As of December 31

Estimated Useful Lives (years) As of December 31,

($ in thousands) 2024 2023

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Building and improvements 30

85,629 85,941

Machinery and equipment 3 - 7

545,791 470,689

Capitalized software 3

20,159 14,331

Transportation equipment 5

24,788 21,900

Leasehold improvements (1)

Property, plant and equipment, at cost 646,099 585,521

accumulated depreciation and amortization ( 292,474 ) ( 234,949 )

41,378 33,736

Property, plant and equipment, gross 744,257 646,099

accumulated depreciation ( 359,354 ) ( 292,474 )

Property, plant and equipment, net $ 384,903 $ 353,625

Total depreciation expense for property, plant and equipment for fiscal 2023, 2022, and 2021 was $ 65.8 million, $ 57.5 million and $ 48.5 million, respectively.

Accrued capital expenditures were approximately $ 2.1 million, $ 1.7 million and $ 2.6 million for the years ended December 31, 2023, 2022, and 2021.

(1) Leasehold improvements are amortized over the shorter of the useful life of those leasehold improvements and the remaining life of the lease term.

Total depreciation expense for property, plant and equipment for the years ended December 31, 2024, 2023, and 2022 was $ 70.2 million, $ 65.8 million and $ 57.5 million, respectively.

Accrued capital expenditures were approximately $ 7.3 million, $ 2.1 million and $ 1.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.

GOODWILL AND INTANGIBLE ASSETS

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($ in thousands) Manufacturing Distribution Total

Balance - January 1, 2022 $ 481,906 $ 69,471 $ 551,377

Balance at January 1, 2023 $ 558,362 $ 70,901 $ 629,263

Acquisitions — 5,905 5,905

Adjustment to prior year preliminary purchase price allocation 2,008 217 2,225

Balance - December 31, 2022 $ 558,362 $ 70,901 $ 629,263

Balance at December 31, 2023 $ 560,370 $ 77,023 $ 637,393

Acquisitions 119,859 40,074 159,933

Adjustment to prior year preliminary purchase price allocation 17 ( 107 ) ( 90 )

Balance - December 31, 2023 $ 560,370 $ 77,023 $ 637,393

Balance at December 31, 2024 $ 680,246 $ 116,990 $ 797,236

As of December 31, 2024 and 2023, accumulated impairment of goodwill in the Manufacturing segment was $ 27.4 million.

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Trademarks 225,527 197,027

Gross intangible assets 1,017,653 1,008,036

Intangible assets, gross 1,265,664 1,017,653

accumulated amortization:

Customer relationships ( 419,358 ) ( 332,220 )

Non-compete agreements ( 20,065 ) ( 18,322 )

Patents ( 23,352 ) ( 15,958 )

Intangible assets, net $ 802,889 $ 651,153

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($ in thousands) Manufacturing Distribution Total

Balance - January 1, 2022 $ 534,827 $ 105,629 $ 640,456

Acquisitions 145,204 260 145,464

Balance at January 1, 2023 $ 622,647 $ 97,583 $ 720,230

Additions (1)

3,061 11,000 14,061

Amortization ( 67,645 ) ( 11,049 ) ( 78,694 )

Adjustment to prior year preliminary purchase price allocation ( 4,360 ) ( 84 ) ( 4,444 )

Balance - December 31, 2022 622,647 97,583 720,230

Acquisitions 3,061 11,000 14,061

Balance at December 31, 2023 $ 553,703 $ 97,450 $ 651,153

Additions (1)

199,966 48,400 248,366

Amortization ( 82,538 ) ( 13,737 ) ( 96,275 )

Adjustment to prior year preliminary purchase price allocation — ( 355 ) ( 355 )

Balance - December 31, 2023 $ 553,703 $ 97,450 $ 651,153

Amortization expense for the next five fiscal years ending December 31 related to finite-lived intangible assets as of December 31, 2023 is estimated to be as follows (in thousands):

Balance at December 31, 2024 $ 671,131 $ 131,758 $ 802,889

(1) Includes intangible assets acquired that did not meet the definition of a business combination of $ 27.8 million and $ 3.4 million for the years ended December 31, 2024 and 2023, respectively.

Estimated amortization expense for the years ending December 31, 2025 through 2029 is presented below:

($ in thousands)

2025 $ 90,696

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2029 $ 61,712

T he following table presents a summary of total debt outstanding:

The following table presents a summary of total debt outstanding:

As of December 31,

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Long-term debt:

1.00 % convertible notes due 2023

$ — $ 172,500

Term loan due 2027 $ — $ 129,375

Term loan due 2029 123,438 —

Revolver due 2029 100,000 —

7.50 % senior notes due 2027

300,000 300,000

1.75 % convertible notes due 2028

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350,000 350,000

Total long-term debt 1,038,125 1,298,414

6.375 % senior notes due 2032

Total debt 1,332,188 1,038,125

convertible notes debt discount, net ( 3,915 ) ( 4,917 )

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On August 11, 2022, the Company entered into the first amendment of its Fourth Amended and Restated Credit Agreement dated April 20, 2021 (as amended, the “2021 Credit Agreement”), under which the senior secured credit facility was increased to $ 925 million from $ 700 million and the maturity date was extended to August 11, 2027 from April 20, 2026.

The senior credit facility under the 2021 Credit Agreement is comprised of a $ 775 million revolving credit facility (the

"Revolver due 2027") and the remaining balance of the $ 150 million term loan (the "Term Loan due 2027" and together with the Revolver due 2027, the "2021 Credit Facility").

Following this amendment, the senior credit facility under the 2021 Credit Agreement was comprised of a $ 775 million revolving credit facility (the "Revolver due 2027") and the remaining balance of the $ 150 million term loan (the "Term Loan due 2027" and together with the Revolver due 2027, the "2021 Credit Facility").

The Company recorded a $ 0.3 million write-off of deferred financing costs as a result of the amendment, which is included in "Selling, general and administrative" in the Company's consolidated statements of income for the year ended December 31, 2022.

Pursuant to the amendment, interest rates for borrowings under the 2021 Credit Agreement transitioned to a Secured Overnight Financing Rate ("SOFR") based option from a London Inter-Bank Offered Rate ("LIBOR") based option.

The Company determined that the amended terms of the 2021 Credit Agreement were not substantially different from the terms of the Company’s 2021 Credit Agreement prior to the amendment.

Accordingly, debt modification accounting treatment was applied and the related impacts were immaterial.

Borrowings under the 2021 Credit Facility are secured by substantially all personal property assets of the Company and any domestic subsidiary guarantors.

Pursuant to the 2021 Credit Agreement:

• The quarterly repayment schedule for the Term Loan due 2027 was revised, with quarterly installments in the following amounts:

(i) beginning June 30, 2021, through and including June 30, 2025, in the amount of $ 1,875,000 , and (ii) beginning September 30, 2025, and each quarter thereafter, in the amount of $ 3,750,000 , with the remaining balance due at maturity;

• The interest rates for borrowings under the Revolver due 2027 and the Term Loan due 2027 are the Prime Rate or SOFR plus a margin, which ranges from 0.00 % to 0.75 % for Prime Rate loans and from 1.00 % to 1.75 % for SOFR loans depending on the Company's consolidated total leverage ratio, as defined below.

The Company is required to pay fees on unused but committed portions of the Revolver due 2027, which range from 0.15 % to 0.225 %;

• Covenants include requirements as to a maximum consolidated secured net leverage ratio ( 2.75 :1.00, increasing to 3.25 :1.00 in certain circumstances in connection with Company acquisitions) and a minimum consolidated fixed charge coverage ratio ( 1.50 :1.00) that are tested on a quarterly basis, and other customary covenants.

The total face value of the Term Loan due 2027 is $ 150.0 million.

Total available borrowing capacity under the Revolver due 2027 is $ 775.0 million.

As of December 31, 2023, the Company had $ 129.4 million outstanding under the Term Loan due 2027 under the SOFR-based option, and no outstanding borrowings for the Revolver due 2027.

During 2024, the Company entered into the Fifth Amended and Restated Credit Agreement (the “2024 Credit Agreement”), and used borrowings under the 2024 Credit Facility (as defined below), together with a portion of the proceeds from the issuance of the 6.375 % Senior Notes (as defined below), to repay all borrowings under its existing 2021 Credit Facility.

2024 Credit Facility

On October 24, 2024, the Company entered into the 2024 Credit Agreement, under which the Company's credit facility was increased to $ 1.0 billion from $ 925.0 million and the maturity date was extended to October 24, 2029 from August 11, 2027.

The credit facility under the 2024 Credit Agreement (the "2024 Credit Facility") is comprised of an $ 875.0 million revolving credit facility (the "Revolver due 2029") and a $ 125.0 million term loan (the "Term Loan due 2029").

Pursuant to the terms of the 2024 Credit Agreement, the interest rate for borrowings under the Revolver due 2029 and the Term Loan due 2029 is either the Prime Rate or SOFR plus a margin, which ranges from 0.00 % to 0.75 % for Prime Rate loans and from 1.00 % to 1.75 % for SOFR loans depending on the Company’s consolidated total leverage ratio.

The interest rate for incremental borrowings as of December 31, 2024 was SOFR plus 1.75 % (or 6.11 %) for the SOFR-based option.

The Company is required to pay fees on committed but unused portions of the Revolver due 2029, which range from 0.15 % to 0.225 %.

The fee payable on committed but unused portions of the Revolver due 2029 was 0.225 % as of December 31, 2024.

The Term Loan due 2029 requires quarterly installments of $ 1,562,500 the last business day of each March, June, September and December, commencing December 31, 2024.

Borrowings under the 2024 Credit Facility are secured by substantially all personal property assets of the Company and any domestic subsidiary guarantors.

Under the terms of the 2024 Credit Agreement, the covenant requiring the Company to have a minimum consolidated fixed charge coverage ratio of 1.5 to 1.0 was replaced with a covenant requiring the Company to have a consolidated interest coverage ratio (the ratio of Consolidated EBITDA to Consolidated Interest Expense, as defined in the 2024 Credit Agreement) of not less than 3.0 to 1.0 tested on a quarterly basis.

In addition, the 2024 Credit Agreement continues to have a covenant requiring the Company to have a maximum consolidated secured net leverage ratio of 2.75 to 1.00 (increasing to 3.25 to 1.00 in certain circumstances).

The Company determined that the amended terms of the 2024 Credit Agreement were not substantially different from the terms of the Company’s 2021 Credit Agreement prior to the amendment.

Accordingly, debt modification accounting treatment was applied and the related impacts were immaterial.

The amount of deferred financing costs write-off as a result of the amendment of the 2021 Credit Facility was immaterial in the Company's consolidated statements of income for the year ended December 31, 2024.

6.375 % Senior Notes due 2032

On October 22, 2024, the Company issued $ 500.0 million aggregate principal amount of 6.375 % Senior Notes due 2032 (the “ 6.375 % Senior Notes”) in a transaction pursuant to Rule 144A under the Securities Act.

The proceeds from the issuance, together with borrowings under the 2024 Credit Facility, were utilized to redeem all of the Company's $ 300.0 million aggregate principal amount of 7.50 % Senior Notes due 2027 (the “ 7.50 % Senior Notes”) on November 7, 2024, to repay all borrowings under the 2021 Credit Facility and to pay fees and expenses in connection with the foregoing.

The 6.375 % Senior Notes will mature on November 1, 2032.

Interest on the 6.375 % Senior Notes is payable semi-annually in cash in arrears on May 1 and November 1 of each year, beginning on May 1, 2025.

The effective interest rate on the 6.375 % Senior Notes, which includes debt issuance costs, is approximately 6.60 %.

In connection with the issuance of the 6.375 % Senior Notes, the Company incurred and capitalized as a reduction of the principal amount of the 6.375 % Senior Notes approximately $ 6.9 million in deferred financing costs which are being amortized using the effective interest rate over the term of the 6.375 % Senior Notes.

The 6.375 % Senior Notes are senior unsecured indebtedness of the Company and are guaranteed by each of the Company’s subsidiaries that guarantee the obligations of the Company under the 2024 Credit Facility.

If the Company experiences specific kinds of changes of control, the Company must offer to repurchase all of the 6.375 % Senior Notes (unless otherwise redeemed) at a price equal to 101 % of the aggregate principal amount thereof, plus accrued and unpaid interest.

The Company may redeem the 6.375 % Senior Notes, in whole or in part, at any time (a) prior to November 1, 2027, at a price equal to 100 % of the principal amount thereof, plus the applicable premium described in the associated indenture and accrued and unpaid interest and (b) on or after November 1, 2027 at specified redemption prices set forth in the indenture, plus accrued and unpaid interest.

In addition, prior to November 1, 2027, the Company may redeem, in one or more transactions, up to an aggregate of 40 % of the original principal amount of the 6.375 % Senior Notes at a redemption price equal to 106.375 % of the principal amount thereof, plus accrued and unpaid interest, with the net cash proceeds of one or more equity offerings.

1.75 % Convertible Senior Notes due 2028

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Prior to June 1, 2028, the 1.75 % Convertible Notes may be converted at the option of the holders only upon the occurrence of specified events and during certain periods, and thereafter until the close of business on the second scheduled trading day immediately preceding the maturity date.

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.

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.

The initial conversion rate for the 1.75 % Convertible Notes is 14.9831 shares of the Company's common stock per $1,000 principal amount of the 1.75 % Convertible Notes (or 3,876,867 shares in the aggregate) and is equal to an initial conversion price of approximately $ 66.74 per share.

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(i) during any calendar quarter, if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day, (ii) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our common stock and the conversion rate on each such trading day and (iii) upon the occurrence of certain specified distributions or corporate events.

As of December 31, 2024, the conditional conversion feature of the 1.75 % Convertible Notes related to the price of our common stock equaling or exceeding 130 % of the conversion price was triggered.

As a result, the 1.75 % Convertible Notes are convertible, in whole or in part, at the option of the holders from January 1, 2025 to March 31, 2025.

Whether the 1.75 % 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 1.75 % Convertible Notes were also convertible from October 1, 2024 to December 31, 2024 based on satisfying this condition in the prior calendar quarter.

No 1.75 % Convertible Notes were converted during the period from October 1, 2024 to December 31, 2024.

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.

4.75 % Senior Notes due 2029

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In September 2019, the Company issued $ 300.0 million aggregate principal amount of 7.50 % Senior Notes due 2027 (the “ 7.50 % Senior Notes”).

The 7.50 % Senior Notes will mature on October 15, 2027.

Interest on the 7.50 % Senior Notes is payable semi-annually in cash in arrears on April 15 and October 15 of each year.

The effective interest rate on the 7.50 % Senior Notes, which includes debt issuance costs, is 7.82 %.

In connection with the issuance of the 7.50 % Senior Notes, the Company incurred and capitalized as a reduction of the principal amount of the 7.50 % Senior Notes approximately $ 5.8 million in deferred financing costs which is amortized using the effective interest rate over the term of the 7.50 % Senior Notes.

The 7.50 % Senior Notes are senior unsecured indebtedness of the Company and are guaranteed by each of the Company’s subsidiaries that guarantee the obligations of the Company under the 2021 Credit Facility.

The Company may redeem the 7.50 % Senior Notes, in whole or in part, at any time (a) prior to October 15, 2022, at a price equal to 100 % of the principal amount thereof, plus the applicable premium described in the associated indenture and accrued and unpaid interest and (b) on or after October 15, 2022 at specified redemption prices set forth in the indenture, plus accrued and unpaid interest.

In addition, prior to October 15, 2022, the Company may redeem, in one or more transactions, up to an aggregate of 40 % of the original principal amount of the 7.50 % Senior Notes at a redemption price equal to 107.5 % of the principal amount thereof,

plus accrued and unpaid interest, with the net cash proceeds of one or more equity offerings.

If the Company experiences specific kinds of changes of control, the Company must offer to repurchase all of the 7.50 % Senior Notes (unless otherwise redeemed) at a price equal to 101 % of the aggregate principal amount thereof, plus accrued and unpaid interest.

1.00 % Convertible Senior Notes due 2023

In January 2018, the Company issued $ 172.5 million aggregate principal amount of 1.00 % Convertible Senior Notes due 2023 (the “ 1.00 % Convertible Notes”).

On February 1, 2023, the Company utilized borrowing capacity under the Revolver due 2027 to satisfy its repayment obligation at maturity of the 1.00 % Convertible Notes.

All noteholders elected to receive cash in repayment of the 1.00 % Convertible Notes.

As noted above, the Company utilized proceeds from the issuance the 6.375 % Senior Notes to redeem at par all of its outstanding $ 300 million aggregate principal amount of its 7.50 % Senior Notes.

The Company recorded a $ 2.5 million write-off of deferred financing costs as a result of the redemption of the 7.50 % Senior Notes which is included in "Selling, general and administrative" in the Company's consolidated statement of income for the year ended December 31, 2024.

Debt Maturities

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Total $ 1,332,188

Letters of credit totaling $ 6.9 million were outstanding as of December 31, 2023 that exist to meet credit requirements for the Company’s insurance providers.

Letters of credit totaling $ 5.0 million and $ 6.9 million were outstanding as of December 31, 2024 and 2023, respectively, that exist to meet credit requirements for the Company’s insurance providers.

Cash paid for interest for the years ended December 31, 2024, 2023 and 2022 was $ 75.9 million, $ 66.3 million and $ 56.9 million, respectively.

FAIR VALUE AND FINANCIAL INSTRUMENTS

The Company accounts for certain assets and liabilities at fair value.

Each fair value measurement must be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety.

The three levels are as follows:

• Level 1 inputs, which are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 inputs, which are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability.

• Level 3 inputs, which are unobservable inputs for the asset or liability.

The following table presents fair values of certain assets and liabilities as of for the years ended December 31, 2024 and December 31, 2023:

As of December 31,

($ in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

7.50 % senior notes due 2027 (1)

$ — $ — $ — $ — $ 303.7 $ —

1.75 % convertible notes due 2028 (1)

$ — $ 351.3 $ — $ — $ 295.2 $ —

4.75 % senior notes due 2029 (1)

$ — $ 330.3 $ — $ — $ 320.2 $ —

6.375 % senior notes due 2032 (1)

$ — $ 485.0 $ — $ — $ — $ —

Term loan due 2029 (1) (2)

$ — $ 123.4 $ — $ — $ — $ —

Term loan due 2027 (1) (2)

$ — $ — $ — $ — $ 129.4 $ —

Revolver due 2029 (1) (2)

$ — $ 100.0 $ — $ — $ — $ —

Contingent consideration (3)

$ — $ — $ 3.6 $ — $ — $ 8.5

(1) The amounts of these notes listed above are the fair values for disclosure purposes only, and they are recorded in the Company's consolidated balance sheets as of December 31, 2024 and 2023 at carrying value.

(2) The carrying amounts of our term loan and revolving credit facility approximate fair value as of December 31, 2024 and 2023 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 3 "Acquisitions".

DERIVATIVE FINANCIAL INSTRUMENTS

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The options expire on December 1, 2028, subject to earlier exercise.

At the same time, the Company also entered into separate, privately negotiated warrant transactions (the “ 1.75 % Convertible Note Warrant Transactions”) with each of the 1.75 % Convertible Note Hedge Counterparties, pursuant to which the Company sold warrants to purchase the same number of shares of the Company's common stock (or 2,584,578 shares) underlying the 1.75 % Convertible Notes, at an initial strike price of approximately $ 123.22 per share, subject to customary anti-dilution adjustments.

At the same time, the Company also entered into separate, privately negotiated warrant transactions (the “ 1.75 % Convertible Note Warrant Transactions”) with each of the 1.75 % Convertible Note Hedge Counterparties, pursuant to which the Company sold warrants giving the counterparties the right to purchase the same number of shares of the Company's common stock (or 3,876,867 shares) underlying the 1.75 % Convertible Notes, at an initial strike price of approximately $ 85.30 per share, subject to customary anti-dilution adjustments.

The warrants have a final expiration date of July 25, 2029.

The Company paid $ 57.4 million associated with the cost of the 1.75 % Convertible Note Hedge Transactions and received proceeds of $ 43.7 million related to the 1.75 % Convertible Note Warrant Transactions.

The 1.75 % Convertible Note Hedge Transactions are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of the 1.75 % Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 1.75 % Convertible Notes.

However, the 1.75 % Convertible Note Warrant Transactions could separately have a

dilutive effect on the Company's common stock to the extent that the market price per share of the common stock exceeds the strike price of the warrants.

Together, the 1.75 % Convertible Note Hedge Transactions and the 1.75 % Convertible Note Warrant Transactions are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of the 1.75 % Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 1.75 % Convertible Notes compared to the potential dilution from the 1.75 % Convertible Notes without such transactions.

The 1.75 % Convertible Note Warrant Transactions may have a dilutive effect on the Company's common stock to the extent that the market price per share

of the common stock exceeds the strike price of the warrants.

See Note 13 "Earnings Per Common Share" for additional information on the dilutive impact of the 1.75 % Convertible Note Warrant Transactions.

As these transactions meet certain accounting criteria, the 1.75 % Convertible Note Hedge Transactions and 1.75 % Convertible Note Warrant Transactions are recorded in stockholders’ equity and are not accounted for as derivatives.

1.00 % Convertible Note Hedge Transactions and Warrant Transactions

In January 2018, in connection with the 1.00 % Convertible Note offering, the Company entered into privately negotiated convertible note hedge transactions (the “ 1.00 % Convertible Note Hedge Transactions”) and at the same time also entered into separate, privately negotiated warrant transactions (the “ 1.00 % Convertible Note Warrant Transactions”).

The 1.00 % Convertible Note Hedge Transactions expired as of February 1, 2023 and the 1.00 % Convertible Note Warrant Transactions expired as of September 20, 2023 in connection with the repayment at maturity of the 1.00 % Convertible Notes.

ACCRUED LIABILITIES

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Provision 32,091 23,820 29,918

Settlements made (in cash or in kind) ( 29,793 ) ( 32,998 ) ( 17,725 )

Settlements made during the year (in cash or in kind) ( 32,424 ) ( 29,793 ) ( 32,998 )

Acquisitions 41 — 1,356

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($ in thousands) 2024 2023 2022

Current income tax expense:

federal $ 35,288 $ 44,126 $ 92,783

State 4,816 23,724 15,755

state and local 11,324 4,816 23,724

Foreign 38 10 56

Total current 46,650 48,952 116,563

Federal ( 3,578 ) ( 7,348 ) ( 1,854 )

State 2,994 ( 2,027 ) ( 2,089 )

Deferred income tax (benefit) expense, net:

U.S federal ( 5,509 ) ( 3,578 ) ( 7,348 )

state and local ( 971 ) 2,994 ( 2,027 )

Foreign ( 1 ) ( 7 ) 26

Total deferred ( 6,481 ) ( 591 ) ( 9,349 )

Income taxes $ 48,361 $ 107,214 $ 68,907

The Company has accounted for in its 2023, 2022, and 2021 income tax provision the impact of Global Intangible Low-Taxed Income, base-erosion anti-abuse tax, interest expense limitations under Section 163(j), and foreign-derived intangible income deductions, although such provisions were either not applicable or resulted in a zero or immaterial impact to the consolidated financial statements.

Total income tax provision $ 40,169 $ 48,361 $ 107,214

The Company has accounted for in its 2024, 2023, and 2022 income tax provision the impact of Global Intangible Low-Taxed Income, base-erosion anti-abuse tax, interest expense limitations under Section 163(j) of the Internal Revenue Code of

1986, and foreign-derived intangible income deductions, although such provisions were either not applicable or resulted in a zero or immaterial impact to the consolidated financial statements.

A reconciliation of the differences between the actual provision for income taxes and income taxes at the federal statutory income tax rate of 21% is as follows:

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Net deferred tax liabilities $ ( 61,346 ) $ ( 46,724 )

Cash paid by the Company for income taxes was $ 84.3 million, $ 117.1 million and $ 46.2 million in 2023, 2022 and 2021, respectively.

Cash paid by the Company for income taxes was $ 38.1 million, $ 84.3 million and $ 117.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024 and December 31, 2023, the Company had gross federal, state, and foreign net operating losses, of approximately $ 12.8 million and $ 15.4 million, respectively.

These loss carryforwards generally expire between tax years ending December 31, 2023 and December 31, 2041.

These loss carryforwards generally expire between tax years

ending December 31, 2024 and December 31, 2041.

The components of the valuation allowance relate to certain acquired federal, state and foreign net operating loss carryforwards that the Company anticipates will not be utilized prior to their expiration, either due to income limitations or limitations under Section 382 of the Internal Revenue Code of 1986.

The tax effected values of these net operating losses are $ 1.2 million and $ 1.3 million as of December 31, 2023 and 2022, respectively, exclusive of valuation allowances of $ 0.5 million and $ 0.5 million as of December 31, 2023 and 2022, respectively.

The tax effected values of these net operating losses are $ 0.8 million and $ 1.2 million at December 31, 2024 and 2023, respectively, exclusive of valuation allowances of $ 0.5 million and $ 0.5 million at December 31, 2024 and 2023, respectively.

The Company is subject to periodic audits by domestic tax authorities.

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STOCK REPURCHASE PROGRAMS

In December 2022, the Company's Board of Directors ("the Board") authorized an increase in the amount of the Company's common stock that may be acquired over the next 24 months under the current stock repurchase program to $ 100 million, including the $ 38.2 million remaining under the previous authorization.

Approximately $ 77.6 million remains in the amount

of the Company's common stock that may be acquired under the current stock repurchase program as of December 31, 2023.

In November 2024, the Company's Board of Directors ("the Board") authorized an increase in the amount of the Company's common stock that may be acquired over the next 24 months under the current stock repurchase program to $ 200 million, including the $ 72.9 million remaining under the previous authorization.

As of December 31, 2024, Patrick has $ 200 million remaining in the amount of the Company's common stock that may be acquired under the current stock repurchase program.

Under the stock repurchase plans, the Company made repurchases of common stock for 2024, 2023, and 2022 as follows:

Year Ended December 31,

($ in millions, except average price data) 2024

Shares repurchased (1)

60,000 415,176 1,988,346

Average price (1)

Aggregate cost (in millions) $ 18.8 $ 77.0 $ 48.9

$ 77.68 $ 45.30 $ 38.72

Aggregate cost $ 4.7 $ 18.8 $ 77.0

(1) Prior year periods reflect the impact of the three-for-two stock split paid on December 13, 2024.

See Note 1 "Basis of Presentation and Significant Accounting Policies" for further details.

The Company’s common stock does not have a stated par value.

As a result, repurchases of common stock have been reflected, using an average cost method, as a reduction of common stock, additional paid-in-capital and retained earnings in the Company’s consolidated balance sheet.

As a result, repurchases of common stock have been reflected, using an average cost method, as a reduction of common stock and retained earnings in the Company’s consolidated balance sheets.

EARNINGS PER COMMON SHARE

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Year Ended December 31,

($ in thousands except per share data) 2023 2022 2021

Earnings for basic per share calculation $ 142,897 $ 328,196 $ 224,915

($ and shares in thousands, except per share data) 2024 2023 2022

Earnings for basic earnings per common share calculation $ 138,401 $ 142,897 $ 328,196

Effect of interest on potentially dilutive convertible notes, net of tax — 162 1,927

Earnings for dilutive per share calculation $ 143,059 $ 330,123 $ 224,915

Earnings for diluted earnings per common share calculation $ 138,401 $ 143,059 $ 330,123

Weighted average common shares outstanding - basic 32,568 32,278 33,210

Weighted average impact of potentially dilutive convertible notes 644 248 3,089

Effect of potentially dilutive securities 340 272 575

Weighted average impact of potentially dilutive warrants 137 — —

Weighted average impact of potentially dilutive securities 350 512 408

Weighted average common shares outstanding - diluted 33,699 33,038 36,707

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Diluted earnings per common share $ 4.11 $ 4.33 $ 8.99

Cash dividends paid per common share $ 1.90 $ 1.44 $ 1.17

(1) Prior year periods reflect the impact of the three-for-two stock split paid on December 13, 2024.

See Note 1 "Basis of Presentation and Significant Accounting Policies" for further details.

The impact on diluted earnings per share from antidilutive securities excluded from the calculation was immaterial for all periods presented.

We lease certain facilities, trailers, forklifts and other assets.

The Company has operating leases for certain facilities, trailers, forklifts and other assets.

Leases with an initial term of 12 months or less are not recorded on the balance sheet and expense related to these short-term leases was immaterial for the years ended December 31, 2024, 2023 and 2022.

Variable lease expense, principally related to trucks, forklifts, and index-related facility rent escalators, was immaterial for the years ended December 31, 2023, 2022 and 2021.

Leases have remaining lease terms of 1 to 16 years.

Variable lease payments, principally related to trucks, forklifts, and index-related facility rent escalators, was immaterial for the years ended December 31, 2024, 2023 and 2022.

The leases have remaining lease terms of 1 to 15 years.

Certain leases include options to renew for an additional term.

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Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for operating leases $ 55,933 $ 49,938 $ 41,061

Right-of-use assets obtained in exchange for lease obligations:

Operating cash flows used for operating leases $ 63,958 $ 55,933 $ 49,938

Right-of-use assets obtained in exchange for new lease obligations:

Operating leases $ 77,558 $ 65,505 $ 50,719

Balance sheet information related to leases was as follows:

Other information related to leases was as follows:

As of December 31,

($ in thousands, except lease term and discount rate) 2023 2022

Operating lease right-of-use assets $ 177,717 $ 163,674

Operating lease liabilities, current portion $ 48,761 $ 44,235

Long-term operating lease liabilities 132,444 122,471

Total lease liabilities $ 181,205 $ 166,706

Weighted average remaining lease term, operating leases (in years) 5.2 4.8

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Total $ 204,723

The Company has additional operating leases that have not yet commenced as of December 31, 2023, and therefore, approximately $ 2.9 million in operating lease right-of-use assets and corresponding operating lease liabilities were not included in our consolidated balance sheet as of December 31, 2023.

These leases are expected to commence in the first quarter of fiscal 2024 with lease terms of 5 years.

The Company had no operating leases that were entered into and have not yet commenced as of December 31, 2024.

COMMITMENTS AND CONTINGENCIES

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All such matters are subject to uncertainties and outcomes that are not predictable with assurance.

Accruals for these items, when applicable, have been provided to the extent that losses are deemed probable and are reasonably estimable.

Accruals for these items, when

applicable, have been provided to the extent that losses are deemed probable and are reasonably estimable.

These accruals are adjusted from time to time as developments warrant.

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The Group subsequently moved for reconsideration of the court’s decision.

On July 3, 2023, the Court granted the Company’s Joint Motion to Dismiss without prejudice, dismissing all remaining claims against the Company for non-consent decree costs and entered an order on June 3, 2024, denying the plaintiff’s motion to bar contribution claims, thereby ending the case against the Company.

On March 19, 2021, the Company received a General Notice of Potential Liability from the U.S.

Environmental Protection Agency (the “EPA”), pursuant to Section 107(a) of CERCLA (the “Notice”).

The Notice provides that the EPA has incurred and will likely incur additional costs relative to conducting a Remedial Investigation/Feasibility Study ("RI/FS"), conducting Remedial Design/Remedial Action ("RD/RA"), and other investigation, planning, response, oversight, and enforcement activities related to the Lusher Street Site.

Because the Company was the owner of and former operator within the Lusher Street Site and as such may be a potentially responsible party pursuant to CERCLA, the Company received the Notice and an indication that it may have a responsibility to contribute to the costs of RI/FS, RD/RA or additional mitigation efforts incurred or to be incurred by the EPA.

On September 15, 2021, the Court granted the parties Joint Motion to Stay Proceedings Pending Negotiations with the EPA.

The proceedings remain subject to the Court-approved stay.

The Company sold certain parcels of real property that the EPA contends are connected to the Superfund Site (the "Divested Properties") in January 2022 for a pretax gain on disposal of $ 5.5 million that is included in Selling, general and administrative expenses in the Company's consolidated statements of income for year ended December 31, 2022.

The purchaser agreed to indemnify, defend and hold the Company harmless for all liability and exposure, both private and to all EPA claims, concerning and relating to the Divested Properties.

No further proceedings occurred in the year ended December 31, 2023.

No further proceedings occurred in the years ended December 31, 2024 and 2023.

As to the real properties that were not among the Divested Properties but remain the subject of the litigation, the Company does not currently believe that the litigation or the Superfund Site matter are likely to have a material adverse impact on its financial condition, results of operations, or cash flows.

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Stock-Based Compensation

The Company has various stock option and stock-based incentive plans and various agreements whereby stock options, restricted stock awards, and SARS were made available to certain key employees, directors, and others based upon meeting various individual, divisional or company-wide performance criteria and time-based criteria.

The Company has various stock option and stock-based incentive plans and various agreements whereby stock options, restricted stock awards, and SARS are made available to certain key employees, directors, and others based upon meeting various individual, divisional or company-wide performance criteria and time-based criteria.

All such awards qualify and are accounted for as equity awards.

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Stock-based compensation expense was $ 16.8 million, $ 19.4 million and $ 21.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Income tax benefit for stock-based compensation expense was $ 4.8 million, $ 5.4 million and $ 5.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Income tax benefit for stock-based compensation expense was $ 4.3 million, $ 4.8 million

and $ 5.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, there was approximately $ 20.9 million of total unrecognized compensation cost related to share-based compensation arrangements granted under incentive plans.

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2024 2023 2022

(shares in thousands) Shares Weighted

($ and shares in thousands, except per share data) Shares Weighted

Price Shares Weighted

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Eligible end of year for exercise 28 $ 27.55 171 $ 27.55 334 $ 29.50

Aggregate intrinsic value ($ in thousands):

Aggregate intrinsic value:

Total options outstanding $ 1,562 $ 6,711 $ 6,204

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As of December 31, 2024, the weighted average remaining contractual term for options outstanding was 4.4 years and the weighted average remaining contractual term for options exercisable was 4.4 years.

The cash received from the exercise of stock options was $ 1.4 million, $ 0.2 million and $ 4.9 million in 2023, 2022 and 2021, respectively.

The income tax benefit related to the stock options exercised was $ 6.7 million in 2021, and immaterial in 2023 and 2022.

The grant date fair value of stock options vested in 2023, 2022 and 2021 was $ 5.9 million, $ 6.9 million and $ 11.6 million, respectively.

The cash received from the exercise of stock options was immaterial for 2024, $ 1.4 million for 2023 and $ 0.2 million for 2022.

The income tax benefit related to the stock options exercised was immaterial for all periods presented.

The grant date fair value of stock options vested in 2023 and 2022 was $ 5.9 million and $ 6.9 million, respectively;

no stock options vested in 2024.

As of December 31, 2024, there was no unrecognized compensation expense related to the stock options.

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2024 2023 2022

(shares in thousands) Shares Weighted

($ and shares in thousands, except per share data) Shares Weighted

Price Shares Weighted

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Eligible end of year for exercise — $ — 336 $ 42.89 336 $ 42.89

Aggregate intrinsic value ($ in thousands):

Aggregate intrinsic value:

Total SARS outstanding $ — $ 8,078 $ 383

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SARS vest ratably over four years and have nine-year contractual terms.

All SARS outstanding as of December 31, 2023 were fully vested.

There were no SARS outstanding as of December 31, 2024 because all SARS outstanding as of December 31, 2023 were exercised during 2024.

As of December 31, 2024, there was no unrecognized compensation expense related to the SARS.

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The performance contingent shares are earned based on the achievement of a cumulative financial performance target, which ranges from less than one year to a seven-year period and vest at the conclusion of the measurement period.

The following table summarizes the activity for restricted stock:

A summary of restricted stock activity, including grants, vesting and forfeitures, is provided below:

Year Ended December 31,

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SEGMENT INFORMATION

Financial results for the Company's reportable segments have been prepared using a management approach, which is consistent with the basis and manner in which financial information is evaluated by the Company's Chief Operating Decision Maker (CODM) in allocating resources and in assessing performance.

The Company has two reportable segments, Manufacturing and Distribution, which are based on its method of internal reporting, which segregates its businesses based on the way in which its CODM allocates resources, evaluates financial results, and determines compensation.

The Company does not measure profitability at the end market (RV, marine, MH and industrial) level.

The Company has two 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:

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CNC molds and composite parts;

roofs/canopies;

wiper systems;

integrated door systems;

windshield systems;

slotwall panels and components;

fender flares and rear panels;

and other products.

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interior and exterior lighting products;

RV awnings, windows, fiberglass siding and roofing;

marine windshields;

and other miscellaneous products in addition to providing transportation and logistics services.

The accounting policies of the segments are the same as those described in Note 1 "Basis of Presentation and Significant Accounting Policies" except that segment data includes intersegment sales.

Assets are identified to the segments except for cash, prepaid expenses, land and buildings, and certain deferred assets, which are identified with the corporate division.

The corporate division charges rent to the segments for use of the land and buildings based upon estimated market rates.

The Company accounts for intersegment sales similar to third party transactions, which reflect current market prices.

The Company also records certain income from purchase incentive agreements at the corporate division.

The Company evaluates the performance of its segments and allocates resources to them based on a variety of indicators including but not limited to sales and operating income as presented in the tables below.

The tables below present information that is provided to the CODM of the Company as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 (in thousands):

The CODM evaluates the performance of the Company's segments and allocates resources to them based on a variety of indicators including but not limited to net sales, gross profit and operating income.

On at least a quarterly basis, the CODM considers actual to budget variances as well as actual to prior year actual performance for both profit measures when making decisions about the allocation of operating and capital resources to each segment.

The CODM also uses segment gross profit and segment operating income to assess the performance of each segment by comparing the results of each segment with one another.

The accounting policies of the segments are the same as those described in Note 1 "Basis of Presentation and Significant Accounting Policies".

Segment net sales data includes inter-segment sales.

The Company accounts for inter-segment sales similar to third party transactions, which reflect current market prices.

Certain income from purchase incentive agreements is

not allocated to the segments and instead recorded at the corporate level.

Assets are identified to the segments except for cash, prepaid expenses, land and buildings, and certain deferred assets, which are identified with corporate.

Corporate charges rent to the segments for use of the land and buildings based upon estimated market rates.

The following tables summarize key financial information by segment:

Year Ended December 31, 2024

Manufacturing Distribution Total

Net outside sales $ 2,586,783 $ 881,262 $ 3,468,045

Intersegment sales 66,474 8,146 74,620

Total sales 2,653,257 889,408 3,542,665

($ in thousands) Manufacturing Distribution Total

Total net sales $ 2,756,547 $ 980,127 $ 3,736,674

Cost of goods sold 2,143,995 755,272 2,899,267

Gross profit $ 612,552 $ 224,855 $ 837,407

Operating expenses 271,591 120,140 391,731

Operating income $ 340,961 $ 104,715 $ 445,676

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

Selling, general and administrative 92,902

Amortization of intangible assets 96,235

Interest expense, net 79,470

Elimination of inter-segment profits 1,501

Other ( 3,002 )

Consolidated income before income taxes $ 178,570

Total assets $ 2,402,533 $ 524,827 $ 2,927,360

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Year Ended December 31, 2023

Manufacturing Distribution Total

Net outside sales $ 3,603,766 $ 1,278,106 $ 4,881,872

Intersegment sales 77,646 9,491 87,137

Total sales 3,681,412 1,287,597 4,969,009

($ in thousands) Manufacturing Distribution Total

Total net sales $ 2,653,257 $ 889,408 $ 3,542,665

Cost of goods sold 2,075,973 693,902 2,769,875

Gross Profit $ 577,284 $ 195,506 $ 772,790

Operating expenses 256,188 105,411 361,599

Operating income $ 321,096 $ 90,095 $ 411,191

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

Selling, general and administrative 82,674

Amortization of intangible assets 78,616

Interest expense, net 68,942

Elimination of inter-segment profits ( 10,299 )

Consolidated income before income taxes $ 191,258

Total assets $ 2,071,500 $ 426,931 $ 2,498,431

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Year Ended December 31, 2022

Manufacturing Distribution Total

Net outside sales $ 2,930,466 $ 1,147,626 $ 4,078,092

Intersegment sales 71,641 7,028 78,669

Total sales 3,002,107 1,154,654 4,156,761

($ in thousands) Manufacturing Distribution Total

Total net sales $ 3,681,412 $ 1,287,597 $ 4,969,009

Cost of goods sold 2,862,452 1,032,711 3,895,163

Gross Profit $ 818,960 $ 254,886 $ 1,073,846

Operating expenses 287,413 117,997 405,410

Operating income $ 531,547 $ 136,889 $ 668,436

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

Selling, general and administrative 85,181

Amortization of intangible assets 73,177

Interest expense, net 60,760

Elimination of inter-segment profits 13,908

Consolidated income before income taxes $ 435,410

Total assets $ 2,302,745 $ 407,861 $ 2,710,606

Capital expenditures $ 67,635 $ 3,801 $ 71,436

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Year Ended December 31,

2023 2022 2021

($ in thousands) 2024 2023 2022

Total sales for reportable segments $ 3,736,674 $ 3,542,665 $ 4,969,009

Elimination of intersegment sales (1)

( 20,991 ) ( 74,620 ) ( 87,137 )

Consolidated net sales $ 3,715,683 $ 3,468,045 $ 4,881,872

Operating income:

Operating income for reportable segments $ 411,191 $ 668,436 $ 486,126

Unallocated corporate expenses ( 72,297 ) ( 99,037 ) ( 78,085 )

Amortization ( 78,694 ) ( 73,229 ) ( 56,329 )

Consolidated operating income $ 260,200 $ 496,170 $ 351,712

As of December 31

Total assets:

Identifiable assets for reportable segments $ 2,498,431 $ 2,710,606

Corporate assets unallocated to segments 52,608 49,018

Cash and cash equivalents 11,409 22,847

Consolidated total assets $ 2,562,448 $ 2,782,471

Year Ended December 31

Depreciation and amortization:

2023 2022 2021

Depreciation and amortization for reportable segments $ 159,572 $ 139,141 $ 126,204

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Consolidated capital expenditures $ 75,682 $ 62,048 $ 79,883

Amortization expense related to intangible assets in the Manufacturing segment for the years ended December 31, 2023, 2022 and 2021 was $ 67.6 million, $ 62.8 million and $ 46.7 million, respectively.

Intangible assets amortization expense in the Distribution segment was $ 11.0 million, $ 10.4 million and $ 9.6 million in 2023, 2022 and 2021, respectively.

Unallocated corporate expenses include corporate general and administrative expenses comprised of wages and other compensation, insurance, taxes, supplies, travel and entertainment, professional fees, amortization of inventory step-up adjustments, and other.

($ in thousands) As of December 31,

Total assets:

Identifiable assets for reportable segments $ 2,927,360 $ 2,498,431

Corporate assets unallocated to segments 60,033 52,608

Cash and cash equivalents 33,561 11,409

Consolidated total assets $ 3,020,954 $ 2,562,448

(1) Eliminations for the year ended December 31, 2024 include only the elimination of inter-segment transactions.

The Company's revenue from external customers and long-lived assets are substantially all attributed to the U.S.

Major Customers

The Company had two major customers that accounted for the following sales in our Manufacturing and Distribution segments for the years ended December 31, 2023, 2022 and 2021 and trade receivables balances as of December 31, 2023 and 2022 as shown in the table below:

The Company had two major customers that accounted for the following consolidated net sales for the years ended December 31, 2024, 2023 and 2022 and trade receivables as of December 31, 2024 and 2023 as shown in the table below:

Year Ended December 31,

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Trade receivables 8 % 5 %

SUBSEQUENT EVENTS

In January 2024, the Company announced that it completed its acquisition of Sportech, LLC, a leading designer and manufacturer of high-value, complex component solutions sold to powersports OEMs, adjacent market OEMs and the aftermarket.

The aggregate purchase price for the acquisition (excluding working capital adjustments) was $ 315 million which was funded with borrowings under the Revolver due 2027 and cash on hand.

As of the purchase date, we will record a preliminary purchase price allocation for the assets acquired and liabilities assumed in connection with the acquisition.

We expect to allocate a significant portion of the purchase price to identifiable intangible assets and goodwill.

Certain portions of the goodwill balance will not be deductible for tax purposes.

The Company will perform its valuation of net assets, based on facts and circumstances that existed as of the transaction date, over a period not to exceed 12 months, and adjustments will be recorded in the periods in which they are determined.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures