What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 194 added, 95 removed, 494 unchanged (37% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

First Quarter Ended

($ and shares in thousands, except per share data) March 30, 2025 March 31, 2024

Second Quarter Ended Six Months Ended

($ and shares in thousands, except per share data) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Net sales $ 1,047,554 $ 1,016,624 $ 2,050,974 $ 1,950,116

8 unchanged sentences

Interest expense, net 18,869 20,343 37,981 40,433

Other expenses 24,420 — 24,420 —

Income before income taxes 43,433 64,346 89,890 103,598

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33,823 33,254 34,116 33,187

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

(1) The prior year periods reflect the impact of the three-for-two stock split paid in December 2024.

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

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

First Quarter Ended

($ in thousands) March 30, 2025 March 31, 2024

Second Quarter Ended Six Months Ended

($ in thousands) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Net income $ 32,436 $ 47,884 $ 70,674 $ 82,977

Other comprehensive income (loss), net of tax:

Foreign currency translation gain (loss) 4 ( 32 )

Total other comprehensive income (loss) 4 ( 32 )

Other comprehensive (loss) income, net of tax:

Foreign currency translation (loss) gain ( 6 ) 3 ( 2 ) ( 29 )

Total other comprehensive (loss) income ( 6 ) 3 ( 2 ) ( 29 )

Comprehensive income $ 32,430 $ 47,887 $ 70,672 $ 82,948

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CONDENSED CONSOLIDATED BALANCE SHEETS

($ in thousands) March 30, 2025 December 31, 2024

($ in thousands) June 29, 2025 December 31, 2024

Current Assets:

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Preferred shares, no par value per share, 1,000,000 shares authorized, none issued and outstanding

Common stock, no par value per share, 40,000,000 shares authorized, 33,533,091 and 33,567,048 issued and outstanding as of March 30, 2025 and December 31, 2024, respectively

Common stock, no par value per share, 60,000,000 shares authorized, 33,278,676 and 33,567,048 issued and outstanding as of June 29, 2025 and December 31, 2024, respectively

202,765 202,353

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

First Quarter Ended

($ in thousands) March 30, 2025 March 31, 2024

Six Months Ended

($ in thousands) June 29, 2025 June 30, 2024

Cash flows from operating activities

4 unchanged sentences

Deferred income taxes ( 7,782 ) —

Amortization deferred debt financing costs 794 804

Amortization of deferred debt financing costs 1,611 1,613

Loss (gain) on sale of property, plant and equipment 2,094 ( 368 )

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Payment of contingent consideration from business acquisitions ( 33 ) ( 4,560 )

Proceeds from exercise of common stock options — 21

Other financing activities ( 309 ) ( 75 )

Net cash provided by financing activities 79,009 341,749

Net increase in cash and cash equivalents 53,000 6,201

Net cash (used in) provided by financing activities ( 114,436 ) 246,706

Net (decrease) increase in cash and cash equivalents ( 11,587 ) 32,551

Cash and cash equivalents at beginning of year 33,561 11,409

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

First Quarter Ended March 30, 2025

Second Quarter Ended June 29, 2025

($ in thousands) Common

2 unchanged sentences

Earnings Total

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

Balance at March 30, 2025 $ 198,408 $ ( 922 ) $ 943,782 $ 1,141,268

Net income — — 32,436 32,436

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Stock-based compensation expense 6,051 — — 6,051

Balance at June 29, 2025 $ 202,765 $ ( 928 ) $ 941,272 $ 1,143,109

Second Quarter Ended June 30, 2024

($ in thousands) Common

Stock Accumulated Other

Comprehensive Loss Retained

Earnings Total

Balance at March 31, 2024 $ 193,930 $ ( 1,031 ) $ 865,637 $ 1,058,536

First Quarter Ended March 31, 2024

Net income — — 47,884 47,884

Dividends declared — — ( 12,127 ) ( 12,127 )

Other comprehensive income, net of tax — 3 — 3

Repurchase of shares for tax payments related to the vesting and exercising of share-based grants ( 95 ) — — ( 95 )

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

Stock-based compensation expense 4,282 — — 4,282

Balance at June 30, 2024 $ 198,138 $ ( 1,028 ) $ 901,394 $ 1,098,504

See accompanying Notes to Condensed Consolidated Financial Statements.

PATRICK INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Continued)

Six Months Ended June 29, 2025

($ in thousands) Common

6 unchanged sentences

Other comprehensive loss, net of tax — ( 2 ) — ( 2 )

Repurchase of shares for tax payments related to the vesting and exercising of share-based grants ( 14,788 ) — — ( 14,788 )

Stock repurchases under buyback program ( 2,277 ) — ( 29,692 ) ( 31,969 )

Repurchases of shares for tax payments related to the vesting and exercise of share-based grants ( 8,611 ) — — ( 8,611 )

Stock-based compensation expense 11,300 — — 11,300

Balance at March 31, 2024 $ 193,930 $ ( 1,031 ) $ 865,637 $ 1,058,536

Balance at June 29, 2025 $ 202,765 $ ( 928 ) $ 941,272 $ 1,143,109

Six Months Ended June 30, 2024

($ in thousands) Common

Stock Accumulated Other

Comprehensive Loss Retained

Earnings Total

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

Net income — — 82,977 82,977

Dividends declared — — ( 24,661 ) ( 24,661 )

Other comprehensive loss, net of tax — ( 29 ) — ( 29 )

Repurchases of shares for tax payments related to the vesting and exercise of share-based grants ( 14,883 ) — — ( 14,883 )

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

Stock-based compensation expense 9,742 — — 9,742

Balance at June 30, 2024 $ 198,138 $ ( 1,028 ) $ 901,394 $ 1,098,504

See accompanying Notes to Condensed Consolidated Financial Statements.

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The accompanying unaudited condensed consolidated financial statements of Patrick Industries, Inc.

(“Patrick”, the “Company”, "we", "our") contain all adjustments (consisting of normal recurring adjustments) that we believe are necessary to present fairly the Company’s financial position as of March 30, 2025 and December 31, 2024, its results of operations for the first quarter ended March 30, 2025 and March 31, 2024, and its cash flows for the three months ended March 30, 2025 and March 31, 2024.

(“Patrick”, the “Company”, "we", "our") contain all adjustments (consisting of normal recurring adjustments) that we believe are necessary to present fairly the Company’s financial position as of June 29, 2025 and December 31, 2024, its results of operations for the second quarter and six months ended June 29, 2025 and June 30, 2024, and its cash flows for the six months ended June 29, 2025 and June 30, 2024.

Patrick's unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S.

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The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year.

The first quarter of fiscal year 2025 ended on March 30, 2025, and the first quarter of fiscal year 2024 ended on March 31, 2024.

The second quarter of fiscal year 2025 ended on June 29, 2025, and the second quarter of fiscal year 2024 ended on June 30, 2024.

Earnings Per Common Share

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, where applicable) by the weighted-average number of common shares outstanding, plus the weighted-average impact of potentially dilutive convertible notes and warrants, plus the dilutive effect of stock options, stock appreciation rights ("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 by the weighted-average number of common shares outstanding, plus the weighted-average impact of potentially dilutive convertible notes and warrants, plus the dilutive effect of stock options, stock appreciation rights ("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.

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Major Customer Concentration

The Company had two major customers that accounted for the following consolidated net sales for the quarter ended March 30, 2025 and March 31, 2024:

First Quarter Ended

March 30, 2025 March 31, 2024

The Company had two major customers that accounted for the following consolidated net sales for the second quarter and six months ended June 29, 2025 and June 30, 2024:

Second Quarter Ended Six Months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Percentage of total net sales:

14 % 15 % 15 % 16 %

14 % 14 % 15 % 14 %

The Company had one major customers that accounted for the following trade receivables as of June 29, 2025 and December 31, 2024:

June 29, 2025 December 31, 2024

Percentage of trade receivables, net:

New Accounting Standards

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Accounting Standards Not Yet Adopted

In January 2025, the FASB issued ASU 2025-01 , "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date".

This update revises the effective date of ASU 2024-03 to clarify that the guidance is to be adopted by all public entities for annual reporting periods beginning after December 15, 2026 and for interim periods within annual reporting periods beginning after December 15, 2027.

The intent of this update is to prevent non-calendar year-end entities from concluding that the initial adoption is required to be in an interim reporting period, rather than an annual reporting period.

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

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

In January 2025, the FASB issued ASU 2025-01 , "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date".

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

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In the following table, revenue from contracts with customers, net of all intercompany sales, is disaggregated by market type and by reportable segment:

First Quarter Ended March 30, 2025

Second Quarter Ended June 29, 2025

($ in thousands) Manufacturing Distribution Total

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Total $ 771,671 $ 275,883 $ 1,047,554

First Quarter Ended March 31, 2024

Second Quarter Ended June 30, 2024

($ in thousands) Manufacturing Distribution Total

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Total $ 753,712 $ 262,912 $ 1,016,624

Six Months Ended June 29, 2025

($ in thousands) Manufacturing Distribution Total

Recreational Vehicle $ 677,242 $ 280,925 $ 958,167

Marine 283,773 21,766 305,539

Powersports 168,953 8,365 177,318

Manufactured Housing 157,864 197,809 355,673

Industrial 234,601 19,676 254,277

Total $ 1,522,433 $ 528,541 $ 2,050,974

Six Months Ended June 30, 2024

($ in thousands) Manufacturing Distribution Total

Recreational Vehicle $ 601,150 $ 269,574 $ 870,724

Marine 291,419 21,574 312,993

Powersports 180,308 6,212 186,520

Manufactured Housing 146,898 183,838 330,736

Industrial 231,480 17,663 249,143

Total $ 1,451,255 $ 498,861 $ 1,950,116

Contract Liabilities

1 unchanged sentence

Inventories consisted of the following:

($ in thousands) March 30, 2025 December 31, 2024

($ in thousands) June 29, 2025 December 31, 2024

Raw materials $ 306,433 $ 292,730

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GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the three months ended March 30, 2025 by segment are as follows:

Changes in the carrying amount of goodwill for the six months ended June 29, 2025 by segment are as follows:

($ in thousands) Manufacturing Distribution Total

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Adjustments to preliminary purchase price allocations 110 412 522

Balance at March 30, 2025

Balance at June 29, 2025

$ 684,383 $ 117,402 $ 801,785

Intangible assets, net consisted of the following as of March 30, 2025 and December 31, 2024:

($ in thousands) March 30, 2025 December 31, 2024

Intangible assets, net consisted of the following as of June 29, 2025 and December 31, 2024:

($ in thousands) June 29, 2025 December 31, 2024

Customer relationships $ 934,715 $ 924,720

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Intangible assets, net $ 766,309 $ 802,889

Changes in the carrying value of intangible assets for the three months ended March 30, 2025 by segment are as follows:

Changes in the carrying value of intangible assets for the six months ended June 29, 2025 by segment are as follows:

($ in thousands) Manufacturing Distribution Total

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Adjustments to preliminary purchase price allocations 357 1,238 1,595

Balance at March 30, 2025

Balance at June 29, 2025

$ 640,899 $ 125,410 $ 766,309

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, and gain key technology.

Business combinations generally take place to strengthen Patrick's positions in existing markets and increase its market share and product offerings, expand into additional markets, and gain key technologies.

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 two acquisitions in the first three months of 2025 (the "2025 Acquisitions").

The Company completed two acquisitions in the first six months of 2025 (the "2025 Acquisitions").

Acquisition-related costs associated with the 2025 Acquisitions were immaterial .

For the first quarter ended March 30, 2025, net sales included in the Company's condensed consolidated statements of income related to the 2025 Acquisitions were $ 4.3 million and operating losses were $ 0.1 million.

For the second quarter and six months ended June 29, 2025, net sales included in the Company's condensed consolidated statements of income related to the 2025 Acquisitions were $ 8.9 million and $ 13.2 million, respectively, and operating losses were $ 0.3 million and $ 0.4 million, respectively.

Assets acquired and liabilities assumed in the acquisitions were recorded on the Company's condensed consolidated balance sheet at their estimated fair values as of the respective dates of acquisition.

For each acquisition, the Company completes its allocation of the purchase price to the fair value of acquired assets and liabilities within a one year measurement period.

The Company completed four acquisitions in the first three months of 2024.

Acquisition-related costs associated with the acquisitions completed in the first three months of 2024 were approximately $ 5.0 million.

For the first quarter ended March 31, 2024, net sales included in the Company's condensed consolidated statements of income related to the acquisitions completed in such quarter were $ 58.1 million, and operating income was $ 11.0 million.

The Company completed two acquisitions in the second quarter of 2024 and six acquisitions in the first six months of 2024.

Acquisition-related costs associated with the acquisitions completed in the first six months of 2024 were approximately $ 5.0 million.

For the second quarter and six months ended June 30, 2024, net sales included in the Company's condensed consolidated statements of income related to the acquisitions completed in the first six months of 2024 were $ 79.6 million and $ 137.7 million, respectively, and operating income was $ 15.7 million and $ 26.6 million, respectively.

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

The Company records a liability for the estimated fair value of the contingent consideration related to each of these acquisitions as part of the initial purchase price based on the present value of the expected future cash flows and the probability of future payments at the date of acquisition.

Changes in the contingent consideration liability for the three months ended March 30, 2025 and March 31, 2024 are as follows:

First Quarter Ended

($ in thousands) March 30, 2025 March 31, 2024

Changes in the contingent consideration liability for the second quarter and six months ended June 29, 2025 and June 30, 2024 are as follows:

Second Quarter Ended

Six Months Ended

($ in thousands) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Fair value at beginning of period $ 3,792 $ 4,630 $ 3,608 $ 8,510

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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:

($ in thousands) March 30, 2025 December 31, 2024

($ in thousands) June 29, 2025 December 31, 2024

Accrued liabilities $ 1,565 $ 1,665

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2025 Acquisitions

The Company completed two acquisitions in the first three months ended March 30, 2025.

Total cash consideration for the 2025 Acquisitions were approximately $ 43.1 million, plus working capital holdbacks and contingent consideration over a less than one-year period based on future performance.

The Company completed two acquisitions in the first six months ended June 29, 2025.

Total cash consideration for the 2025 Acquisitions was approximately $ 43.8 million, plus contingent consideration over a less than one-year period based on future performance in connection with one acquisition.

As the Company finalizes the fair value of the acquired assets and assumed liabilities, additional purchase price adjustments may be recorded during the measurement period.

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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 $ 416.1 million, plus contingent consideration over a three-year period based on future performance.

Purchase price allocations and all valuation activities in connection with the 2024 Acquisitions have been finalized for four of the 2024 Acquisitions.

Changes to preliminary purchase accounting estimates recorded in the three months ended March 30, 2025 related to the 2024 Acquisitions were immaterial.

Purchase price allocations and all valuation activities in connection with the 2024 Acquisitions have been finalized for six of the 2024 Acquisitions.

Changes to preliminary purchase accounting estimates recorded in the six months ended June 29, 2025 related to the 2024 Acquisitions were immaterial.

The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of each of the 2025 Acquisitions and 2024 Acquisitions:

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Cash, net of cash acquired $ 43,847 $ 319,073 $ 96,998 $ 416,071

Working capital holdback and other, net 703 — — —

Contingent consideration (1)

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Pro Forma Information (Unaudited)

The following pro forma information for the first quarter ended March 30, 2025 and March 31, 2024 assumes the 2025 Acquisitions and 2024 Acquisitions occurred as of the beginning of the year immediately preceding each such acquisition.

The following pro forma information for the second quarter and six months ended June 29, 2025 and June 30, 2024 assumes the 2025 Acquisitions and 2024 Acquisitions occurred as of the beginning of the year immediately preceding each such acquisition.

The pro forma information contains the actual operating results of the 2025 Acquisitions and 2024 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 incremental borrowings incurred in connection with each transaction.

In addition, the pro forma information includes incremental amortization expense, in the aggregate, related to intangible assets acquired in connection with the transactions of $ 0.1 million for the first quarter ended March 30, 2025 and $ 2.0 million for the first quarter ended March 31, 2024.

First Quarter Ended

($ in thousands, except per share data) March 30, 2025 March 31, 2024

In addition, the pro forma information includes incremental amortization expense, in the aggregate, related to intangible assets acquired in connection with the transactions of zero and $ 0.1 million for the second quarter and six months ended June 29, 2025, respectively, and $ 0.6 million and $ 2.3 million for the second quarter and six months ended June 30, 2024, respectively.

Second Quarter Ended

Six Months Ended

($ in thousands, except per share data) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Revenue $ 1,047,554 $ 1,047,272 $ 2,057,427 $ 2,035,596

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STOCK-BASED COMPENSATION

The Company recorded stock-based compensation expense, net of forfeitures, of approximately $ 5.2 million and $ 5.5 million in the first quarter ended March 30, 2025 and March 31, 2024, respectively.

The Board approved various share grants under the Company’s 2009 Omnibus Incentive Plan in the three months ended March 30, 2025 totaling 216,078 shares in the aggregate at an average fair value of $ 95.91 per share at grant date for a total fair value at grant date of $ 20.7 million.

The Company recorded stock-based compensation expense, net of forfeitures, of approximately $ 6.1 million and $ 11.3 million in the second quarter and six months ended June 29, 2025, respectively, and $ 4.2 million and $ 9.7 million in the second quarter and six months ended June 30, 2024, respectively.

The Board approved various share grants under the Company’s 2009 Omnibus Incentive Plan in the six months ended June 29, 2025 totaling 242,035 shares in the aggregate at an average fair value of $ 94.97 per share at grant date for a total fair value at grant date of $ 23.0 million.

Stock Appreciation Rights ("SARs"):

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The SARs are to be settled in shares of common stock or, at the sole discretion of the Board, in cash.

The total remaining cost to be expensed over the four-year vesting period will be $ 6.1 million which will be expensed ratably over the four-year vesting period.

As of June 29, 2025, the total remaining cost to be expensed over the four-year vesting period will be $ 5.7 million which will be expensed ratably over the four-year vesting period.

Stock Options:

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The stock options vest pro-rata over four years from the grant date and have nine-year contractual terms.

The total remaining cost will be $ 8.6 million which will be expensed ratably over the four-year vesting period.

As of June 29, 2025, the total remaining cost will be $ 8.1 million which will be expensed ratably over the four-year vesting period.

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

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EARNINGS PER COMMON SHARE

Earnings per common share calculated for the first quarter of 2025 and 2024 is as follows:

First Quarter Ended

($ and shares in thousands, except per share data) March 30, 2025 March 31, 2024

Earnings per common share calculated for the second quarter and first six months of 2025 and 2024 is as follows:

($ and shares in thousands, except per share data) Second Quarter Ended

Six Months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Earnings for basic earnings per common share calculation $ 32,436 $ 47,884 $ 70,674 $ 82,977

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Diluted earnings per common share $ 0.96 $ 1.44 $ 2.07 $ 2.50

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

(1) The prior year periods reflect the impact of the three-for-two stock split paid in December 2024.

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

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

A summary of total debt outstanding at March 30, 2025 and December 31, 2024 is as follows:

($ in thousands) March 30, 2025 December 31, 2024

A summary of total debt outstanding at June 29, 2025 and December 31, 2024 is as follows:

($ in thousands) June 29, 2025 December 31, 2024

Long-term debt:

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Total long-term debt, less current maturities, net $ 1,266,298 $ 1,311,684

As of March 30, 2025, the Company maintained a senior secured credit facility comprised of a $ 875 million revolving credit facility (the "Revolver due 2029") and a $ 125 million term loan (the "Term Loan due 2029") and together with the Revolver due 2029, (the "2024 Credit Facility").

The interest rate for incremental borrowings under the Revolver due 2029 as of March 30, 2025 was the Secured Overnight Financing Rate (“SOFR”) plus 1.75 % (or 6.07 %) for the SOFR-based option.

The fee payable on committed but unused portions of the Revolver due 2029 was 0.225 % as of March 30, 2025.

Total cash interest paid for the first quarter of 2025 and 2024 was $ 1.7 million and $ 8.5 million, respectively.

As of June 29, 2025, the Company maintained a senior secured credit facility comprised of a $ 875 million revolving credit facility (the "Revolver due 2029") and a $ 125 million term loan (the "Term Loan due 2029") and together with the Revolver due 2029, (the "2024 Credit Facility").

The interest rate for incremental borrowings under the Revolver due 2029 as of June 29, 2025 was the Secured Overnight Financing Rate (“SOFR”) plus 1.75 % (or 6.07 %) for the SOFR-based option.

The fee payable on committed but unused portions of the Revolver due 2029 was 0.225 % as of June 29, 2025.

Total cash interest paid was $ 32.9 million and $ 34.6 million for the second quarter and six months ended June 29, 2025, respectively, and $ 31.6 million and $ 40.2 million for the second quarter and six months ended June 30, 2024, respectively.

Conditional Conversion Feature of the 1.75 % Convertible Senior Notes due 2028

As of March 30, 2025, the conditional conversion feature of the 1.75 % Convertible Senior Notes due 2028 (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 April 1, 2025 to June 30, 2025.

As of June 29, 2025, the conditional conversion feature of the 1.75 % Convertible Senior Notes due 2028 (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 July 1, 2025 to September 30, 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 January 1, 2025 to March 31, 2025 based on satisfying this condition in the prior calendar quarter.

The 1.75 % Convertible Notes converted during the period from January 1, 2025 to March 31, 2025 were immaterial.

The 1.75 % Convertible Notes were also convertible in each calendar quarter beginning with the quarter ended December 31, 2024 based on satisfying this condition in the respective prior calendar quarter.

The 1.75 % Convertible Notes converted during the period from January 1, 2025 to June 30, 2025 were immaterial.

The Company has the intent and ability to utilize available borrowing capacity under the Revolver due 2029 to satisfy any cash conversion obligations that it may have, should holders choose to exercise their conversion rights during the period noted above.

FAIR VALUE MEASUREMENTS

The following table presents fair values of certain assets and liabilities as of March 30, 2025 and December 31, 2024:

March 30, 2025 December 31, 2024

The following table presents fair values of certain assets and liabilities as of June 29, 2025 and December 31, 2024:

June 29, 2025 December 31, 2024

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

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$ — $ — $ 3.8 $ — $ — $ 3.6

(1) The amounts of these notes listed above are the fair values for disclosure purposes only, and they are recorded in the Company's condensed consolidated balance sheets as of March 30, 2025 and December 31, 2024 at carrying value.

(2) The carrying amounts of our term loan and revolving credit facility approximate fair value as of March 30, 2025 and December 31, 2024 based upon their terms and conditions in comparison to the terms and conditions of debt instruments with similar terms and conditions available at those dates.

(1) The amounts of these notes listed above are the fair values for disclosure purposes only, and they are recorded in the Company's condensed consolidated balance sheets as of June 29, 2025 and December 31, 2024 at carrying value.

(2) The carrying amounts of our term loan and revolving credit facility approximate fair value as of June 29, 2025 and December 31, 2024 based upon their terms and conditions in comparison to the terms and conditions of debt instruments with similar terms and conditions available at those dates.

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

The effective tax rate in the first quarter of 2025 and 2024 was 17.7 % and 10.6 %, respectively.

The first quarter of 2025 and 2024 tax rates include the impact of the recognition of excess tax benefits on share-based compensation that was recorded as a reduction to income tax expense in the amount of $ 3.2 million and $ 6.0 million, respectively.

Cash paid for income taxes, net of refunds, was $ 7.4 million and $ 0.1 million in the first quarter of 2025 and 2024, respectively.

The effective tax rate in the second quarter of 2025 and 2024 was 25.3 % and 25.6 %, respectively, and the effective tax rate for the comparable six month periods was 21.4 % and 19.9 %, respectively.

The first six months of 2025 and 2024 tax rates include the impact of the recognition of excess tax benefits on share-based compensation that was recorded as a reduction to income tax expense in the amount of $ 3.0 million and $ 5.6 million, respectively.

Cash paid for income taxes, net of refunds, was $ 14.9 million and $ 22.3 million in the second quarter and first six months of 2025, respectively, and $ 19.1 million and $ 19.2 million in the second quarter and first six months of 2024, respectively.

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was signed into law.

The OBBBA makes permanent many of the expired and expiring tax provisions originally enacted in the Tax Cuts and Jobs Act of 2017, including the immediate expensing of domestic research and development expenditures, more favorable business interest deductibility and 100 percent first-year bonus depreciation on qualifying property with effective dates in 2025.

The Company is currently evaluating the impact of these provisions.

However, since the OBBBA was enacted after the end of the second quarter of 2025, any resulting impacts will be reflected in subsequent reporting periods and are not expected to be material.

SEGMENT INFORMATION

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thermoformed shower surrounds;

specialty bath and closet building products;

specialty bath and

closet building products;

fiberglass and plastic helm systems and components products;

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The following tables summarize key financial information by segment:

First Quarter Ended March 30, 2025

Second Quarter Ended June 29, 2025

($ in thousands) Manufacturing Distribution Total

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Elimination of inter-segment profits ( 1 )

Other expense 24,420

Consolidated income before income taxes $ 43,433

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Depreciation and amortization $ 36,413 $ 4,559 $ 40,972

First Quarter Ended March 31, 2024

Second Quarter Ended June 30, 2024

($ in thousands) Manufacturing

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$ 35,673 $ 4,067 $ 39,740

A reconciliation of certain line items pertaining to the total reportable segments to the condensed consolidated financial statements in the first quarter ended March 30, 2025 and March 31, 2024 and as of March 30, 2025 and December 31, 2024 is as follows:

First Quarter Ended

($ in thousands) March 30, 2025 March 31, 2024

Six Months Ended June 29, 2025

($ in thousands) Manufacturing Distribution Total

Total net sales $ 1,531,007 $ 531,574 $ 2,062,581

Cost of goods sold 1,182,328 397,699 1,580,027

Gross profit $ 348,679 $ 133,875 $ 482,554

Operating expenses 147,435 76,457 223,892

Operating income $ 201,244 $ 57,418 $ 258,662

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

Selling, general and administrative 55,884

Amortization of intangible assets 48,976

Interest expense, net 37,981

Elimination of inter-segment profits 1,511

Other expense 24,420

Consolidated income before income taxes $ 89,890

Capital expenditures $ 29,821 $ 554 $ 30,375

Depreciation and amortization $ 72,916 $ 9,131 $ 82,047

Six Months Ended June 30, 2024

($ in thousands) Manufacturing Distribution Total

Total net sales $ 1,488,741 $ 503,739 $ 1,992,480

Cost of goods sold 1,153,823 395,550 1,549,373

Gross profit $ 334,918 $ 108,189 $ 443,107

Operating expenses 138,716 54,311 193,027

Operating income $ 196,202 $ 53,878 $ 250,080

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

Selling, general and administrative 52,577

Amortization of intangible assets 47,088

Interest expense, net 40,433

Elimination of inter-segment profits 6,384

Consolidated income before income taxes $ 103,598

Capital expenditures $ 18,280 $ 5,730 $ 24,010

Depreciation and amortization $ 71,090 $ 7,388 $ 78,478

A reconciliation of certain line items pertaining to the total reportable segments to the condensed consolidated financial statements in the second quarter and first six months ended June 29, 2025 and June 30, 2024, and as of June 29, 2025 and December 31, 2024 is as follows:

Second Quarter Ended

Six Months Ended

($ in thousands) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Total sales for reportable segments $ 1,054,008 $ 1,039,468 $ 2,062,581 $ 1,992,480

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Consolidated capital expenditures $ 18,275 $ 16,916 $ 38,446 $ 32,411

(1) Eliminations for the first quarter ended March 30, 2025 include only the elimination of inter-segment transactions.

($ in thousands) March 30, 2025 December 31, 2024

(1) Eliminations for the second quarter and six months ended June 29, 2025 include only the elimination of inter-segment transactions.

($ in thousands) June 29, 2025 December 31, 2024

Total assets:

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In November 2024, 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 March 30, 2025, Patrick had approximately $ 191.5 million remaining in the amount of the Company's common stock that may be acquired under the current stock repurchase program.

As of June 29, 2025, Patrick had approximately $ 168.0 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 plan, the Company made repurchases of common stock as follows for the respective periods:

First Quarter Ended

($ in millions, except average price data) March 30, 2025 March 31, 2024

Second Quarter Ended

Six Months Ended

($ in millions, except average price data) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Shares repurchased 277,849 — 377,612 —

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However, any litigation is inherently uncertain, the EPA has yet to select a final remedy for the Superfund Site, and any judgment or injunctive relief entered against us or any adverse settlement could materially and adversely impact our business, results of operations, financial condition, and prospects.

SUBSEQUENT EVENTS

On July 11, 2025, the Company agreed to settle a pending lawsuit that existed as of June 29, 2025.

The lawsuit involved claims of wrongful death arising out of a motor vehicle accident which resulted in two fatalities.

The settlement is conditioned upon, among other matters, the parties’ finalization and execution of a confidential settlement agreement, to be court-approved in part, and payment by the Company of $ 24.4 million during the third quarter of 2025.

In accordance with ASC 855, Subsequent Events, this amount reflects the Company’s probable obligation, as a result, for the second quarter and the first six months ended June 29, 2025, $ 24.4 million has been recognized within "Other expenses" in the Company’s condensed consolidated financial statements of income.

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-Q

Item 1. Financial Statements