PATRICK INDUSTRIES INC 10-Q

ITEM 1. FINANCIAL STATEMENTS PATRICK INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended ($ and shares in thousands, except per share data) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Net sales $ 1,041,704 $ 1,047,554 $ 2,038,876 $ 2,050,974 Cost of goods sold 794,129 796,922 1,564,441 1,571,751 Gross profit 247,575 250,632 474,435 479,223 Operating expenses: Warehouse and delivery 50,608 46,075 95,640 90,657 Selling, general and administrative 96,188 93,206 189,284 187,137 Amortization of intangible assets 23,744 24,629 47,754 49,138 Total operating expenses 170,540 163,910 332,678 326,932 Operating income 77,035 86,722 141,757 152,291 Interest expense, net 18,978 18,869 37,366 37,981 Other expenses — 24,420 — 24,420 Income before income taxes 58,057 43,433 104,391 89,890 Income taxes 14,636 10,997 21,490 19,216 Net income $ 43,421 $ 32,436 $ 82,901 $ 70,674 Basic earnings per common share $ 1.36 $ 1.00 $ 2.57 $ 2.17 Diluted earnings per common share $ 1.28 $ 0.96 $ 2.37 $ 2.07 Weighted average shares outstanding – Basic 31,913 32,520 32,199 32,595 Weighted average shares outstanding – Diluted 33,973 33,823 34,993 34,116 See accompanying Notes to Condensed Consolidated Financial Statements. 3 Table of Contents PATRICK INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended Six Months Ended ($ in thousands) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Net income $ 43,421 $ 32,436 $ 82,901 $ 70,674 Other comprehensive income (loss), net of tax: Foreign currency translation gain (loss) 31 ( 6 ) 42 ( 2 ) Other ( 256 ) — ( 216 ) — Total other comprehensive loss ( 225 ) ( 6 ) ( 174 ) ( 2 ) Comprehensive income $ 43,196 $ 32,430 $ 82,727 $ 70,672 See accompanying Notes to Condensed Consolidated Financial Statements. 4 Table of Contents PATRICK INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) ($ in thousands) June 28, 2026 December 31, 2025 ASSETS Current Assets: Cash and cash equivalents $ 29,160 $ 26,432 Trade and other receivables, net 276,863 185,405 Inventories 653,255 595,265 Prepaid expenses and other 63,180 66,020 Total current assets 1,022,458 873,122 Property, plant and equipment, net 410,230 408,502 Operating lease right-of-use assets 227,533 199,087 Goodwill 839,716 840,101 Intangible assets, net 699,337 742,561 Other non-current assets 12,012 12,801 Total assets $ 3,211,286 $ 3,076,174 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities: Current maturities of long-term debt $ 6,250 $ 6,250 Current operating lease liabilities 57,977 54,956 Accounts payable 224,474 192,448 Accrued liabilities 94,135 94,412 Other current liabilities 416 424 Total current liabilities 383,252 348,490 Long-term debt, less current maturities, net 1,412,496 1,282,821 Long-term operating lease liabilities 174,717 148,889 Deferred tax liabilities, net 96,079 96,875 Other long-term liabilities 13,666 14,802 Total liabilities 2,080,210 1,891,877 Shareholders' equity Preferred shares, no par value per share, 1,000,000 shares authorized, none issued and outstanding — — Common stock, no par value per share, 60,000,000 shares authorized, 32,124,821 and 33,224,772 issued and outstanding as of June 28, 2026 and December 31, 2025, respectively 201,986 208,210 Accumulated other comprehensive loss ( 1,050 ) ( 876 ) Retained earnings 930,140 976,963 Total shareholders' equity 1,131,076 1,184,297 Total liabilities and shareholders' equity $ 3,211,286 $ 3,076,174 See accompanying Notes to Condensed Consolidated Financial Statements. 5 Table of Contents PATRICK INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended ($ in thousands) June 28, 2026 June 29, 2025 Cash flows from operating activities Net income $ 82,901 $ 70,674 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 85,790 85,255 Stock-based compensation expense 11,986 11,300 Deferred income taxes ( 796 ) ( 7,782 ) Amortization of deferred debt financing costs 1,660 1,611 (Gain) loss on sale of property, plant and equipment ( 584 ) 2,094 Other 706 ( 1,422 ) Change in operating assets and liabilities, net of acquisitions of businesses: Trade and other receivables, net ( 91,000 ) ( 88,883 ) Inventories ( 56,504 ) 4,655 Prepaid expenses and other assets 3,378 4,493 Accounts payable, accrued liabilities and other 31,370 107,472 Net cash provided by operating activities 68,907 189,467 Cash flows from investing activities Purchases of property, plant and equipment ( 36,558 ) ( 38,446 ) Proceeds from sale of property, plant and equipment 1,645 1,832 Business acquisitions, net of cash acquired ( 7,297 ) ( 48,140 ) Other investing activities ( 2,007 ) ( 1,864 ) Net cash used in investing activities ( 44,217 ) ( 86,618 ) Cash flows from financing activities Term debt repayments ( 1,563 ) ( 1,563 ) Borrowings on revolver 560,724 345,536 Repayments on revolver ( 430,724 ) ( 390,536 ) Stock repurchases under buyback program ( 106,133 ) ( 31,969 ) Cash dividends paid to shareholders ( 31,208 ) ( 26,951 ) Taxes paid for share-based payment arrangements ( 11,270 ) ( 8,611 ) Payment of contingent consideration from business acquisitions ( 1,750 ) ( 33 ) Other financing activities ( 38 ) ( 309 ) Net cash used in financing activities ( 21,962 ) ( 114,436 ) Net increase (decrease) in cash and cash equivalents 2,728 ( 11,587 ) Cash and cash equivalents at beginning of year 26,432 33,561 Cash and cash equivalents at end of period $ 29,160 $ 21,974 See accompanying Notes to Condensed Consolidated Financial Statements. 6 Table of Contents PATRICK INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) Three Months Ended June 28, 2026 ($ in thousands) Common Stock Accumulated Other Comprehensive Loss Retained Earnings Total Balance at March 29, 2026 $ 202,231 $ ( 825 ) $ 986,964 $ 1,188,370 Net income — — 43,421 43,421 Dividends declared — — ( 14,945 ) ( 14,945 ) Other comprehensive loss, net of tax — ( 225 ) — ( 225 ) Stock repurchases under buyback program ( 6,140 ) — ( 85,300 ) ( 91,440 ) Repurchase of shares for tax payments related to the vesting and exercising of share-based grants ( 113 ) — — ( 113 ) Stock-based compensation expense 6,008 — — 6,008 Balance at June 28, 2026 $ 201,986 $ ( 1,050 ) $ 930,140 $ 1,131,076 Three Months Ended June 29, 2025 ($ in thousands) Common Stock Accumulated Other Comprehensive Loss Retained Earnings Total Balance at March 30, 2025 $ 198,408 $ ( 922 ) $ 943,782 $ 1,141,268 Net income — — 32,436 32,436 Dividends declared — — ( 13,164 ) ( 13,164 ) Other comprehensive loss, net of tax — ( 6 ) — ( 6 ) Stock repurchases under buyback program ( 1,676 ) — ( 21,782 ) ( 23,458 ) Repurchase of shares for tax payments related to the vesting and exercising of share-based grants ( 18 ) — — ( 18 ) Stock-based compensation expense 6,051 — — 6,051 Balance at June 29, 2025 $ 202,765 $ ( 928 ) $ 941,272 $ 1,143,109 See accompanying Notes to Condensed Consolidated Financial Statements. 7 Table of Contents PATRICK INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) Six Months Ended June 28, 2026 ($ in thousands) Common Stock Accumulated Other Comprehensive Loss Retained Earnings Total Balance at December 31, 2025 $ 208,210 $ ( 876 ) $ 976,963 $ 1,184,297 Net income — — 82,901 82,901 Dividends declared — — ( 30,531 ) ( 30,531 ) Other comprehensive loss, net of tax — ( 174 ) — ( 174 ) Stock repurchases under buyback program ( 6,940 ) — ( 99,193 ) ( 106,133 ) Repurchase of shares for tax payments related to the vesting and exercising of share-based grants ( 11,270 ) — — ( 11,270 ) Stock-based compensation expense 11,986 — — 11,986 Balance at June 28, 2026 $ 201,986 $ ( 1,050 ) $ 930,140 $ 1,131,076 Six Months Ended June 29, 2025 ($ in thousands) Common Stock Accumulated Other Comprehensive Loss Retained Earnings Total Balance at December 31, 2024 $ 202,353 $ ( 926 ) $ 926,939 $ 1,128,366 Net income — — 70,674 70,674 Dividends declared — — ( 26,649 ) ( 26,649 ) Other comprehensive loss, net of tax — ( 2 ) — ( 2 ) Stock repurchases under buyback program ( 2,277 ) — ( 29,692 ) ( 31,969 ) Repurchase of shares for tax payments related to the vesting and exercising of share-based grants ( 8,611 ) — — ( 8,611 ) Stock-based compensation expense 11,300 — — 11,300 Balance at June 29, 2025 $ 202,765 $ ( 928 ) $ 941,272 $ 1,143,109 See accompanying Notes to Condensed Consolidated Financial Statements. 8 Table of Contents PATRICK INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation 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 June 28, 2026 and December 31, 2025, its results of operations for the three and six months ended June 28, 2026 and June 29, 2025, and its cash flows for the six months ended June 28, 2026 and June 29, 2025. Patrick's unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The accompanying unaudited condensed consolidated financial statements for Patrick do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Patrick’s Audited Consolidated Financial Statements and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 19, 2026. The Company maintains its financial records on the basis of a fiscal year ending on December 31, with the fiscal quarters spanning approximately thirteen weeks. The first quarter ends on the Sunday closest to the end of the first thirteen-week period. The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The second quarter of fiscal year 2026 ended on June 28, 2026, and the second quarter of fiscal year 2025 ended on June 29, 2025. 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 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. Common Stock Equivalents are not included in the computation of diluted earnings per common share if their effect would be anti-dilutive. Other expenses Other expenses were zero for the three and six months ended June 28, 2026. During the three and six months ended June 29, 2025, the Company recognized a legal settlement expense of $ 24.4 million, related to a motor vehicle accident that resulted in two fatalities, within "Other expenses" in the Company's condensed consolidated statements of income. Summary of Significant Accounting Policies A summary of significant accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 19, 2026. 9 Table of Contents Major Customer Concentration The Company had two major customers that accounted for the following consolidated net sales for the three and six months ended June 28, 2026 and June 29, 2025: Three Months Ended Six Months Ended June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Percentage of total net sales: Customer 1 12 % 14 % 13 % 15 % Customer 2 12 % 14 % 13 % 15 % New Accounting Standards Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were either assessed and determined to be not applicable or are expected to have an immaterial impact on the Company’s unaudited condensed consolidated financial statements. Recently Issued Accounting Pronouncements Accounting Standards Not Yet Adopted In September 2025, the FASB issued ASU 2025-06 , "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software" . This update eliminates the previous stage-based capitalization model for internal-use software projects and instead requires capitalization once management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. The update permits an entity to apply the new guidance using a prospective transition approach, modified transition approach or a retrospective transition approach. This ASU is effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of ASU 2025-06 will have on the Company's consolidated financial statements. 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. 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 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. 10 Table of Contents NOTE 2. REVENUE RECOGNITION In the following table, revenue from contracts with customers, net of all intercompany sales, is disaggregated by market type and by reportable segment: Three Months Ended June 28, 2026 ($ in thousands) Manufacturing Distribution Total Market type: Recreational Vehicle $ 291,091 $ 115,930 $ 407,021 Marine 178,804 12,548 191,352 Powersports 117,167 5,901 123,068 Manufactured Housing 80,450 94,729 175,179 Industrial 135,109 9,975 145,084 Total $ 802,621 $ 239,083 $ 1,041,704 Three Months Ended June 29, 2025 ($ in thousands) Manufacturing Distribution Total Market type: Recreational Vehicle $ 331,269 $ 148,006 $ 479,275 Marine 144,407 12,085 156,492 Powersports 91,719 4,659 96,378 Manufactured Housing 81,537 100,910 182,447 Industrial 122,739 10,223 132,962 Total $ 771,671 $ 275,883 $ 1,047,554 Six Months Ended June 28, 2026 ($ in thousands) Manufacturing Distribution Total Market type: Recreational Vehicle $ 622,854 $ 230,657 $ 853,511 Marine 339,247 21,990 361,237 Powersports 215,696 10,989 226,685 Manufactured Housing 151,789 177,956 329,745 Industrial 249,067 18,631 267,698 Total $ 1,578,653 $ 460,223 $ 2,038,876 Six Months Ended June 29, 2025 ($ in thousands) Manufacturing Distribution Total Market type: 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 11 Table of Contents Contract Liabilities Contract liabilities, representing upfront payments from customers received prior to satisfying performance obligations, were immaterial as of the beginning and end of all periods presented and changes in contract liabilities were immaterial during all periods presented. NOTE 3. INVENTORY Inventories consisted of the following: ($ in thousands) June 28, 2026 December 31, 2025 Raw materials $ 364,909 $ 315,508 Work in process 21,185 19,586 Finished goods 135,025 128,766 Less: reserve for inventory excess and obsolescence ( 16,936 ) ( 14,754 ) Total manufactured goods, net 504,183 449,106 Materials purchased for resale (distribution products) 157,680 154,319 Less: reserve for inventory excess and obsolescence ( 8,608 ) ( 8,160 ) Total materials purchased for resale (distribution products), net 149,072 146,159 Total inventories $ 653,255 $ 595,265 NOTE 4. GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill for the six months ended June 28, 2026 by segment are as follows: ($ in thousands) Manufacturing Distribution Total Balance at December 31, 2025 $ 722,030 $ 118,071 $ 840,101 Acquisitions 307 2,748 3,055 Adjustments to preliminary purchase price allocations ( 3,440 ) — ( 3,440 ) Balance at June 28, 2026 $ 718,897 $ 120,819 $ 839,716 12 Table of Contents Intangible assets, net consisted of the following as of June 28, 2026 and December 31, 2025: ($ in thousands) June 28, 2026 December 31, 2025 Customer relationships $ 953,969 $ 949,448 Non-compete agreements 27,376 27,376 Patents 94,959 94,949 Trademarks 230,877 230,877 Intangible assets, gross 1,307,181 1,302,650 Less: accumulated amortization Customer relationships ( 549,470 ) ( 506,656 ) Non-compete agreements ( 23,183 ) ( 22,204 ) Patents ( 35,191 ) ( 31,229 ) Intangible assets, net $ 699,337 $ 742,561 Changes in the carrying value of intangible assets by segment are as follows: ($ in thousands) Manufacturing Distribution Total Balance at December 31, 2025 $ 624,213 $ 118,348 $ 742,561 Additions 559 3,971 4,530 Amortization ( 40,250 ) ( 7,504 ) ( 47,754 ) Balance at June 28, 2026 $ 584,522 $ 114,815 $ 699,337 NOTE 5. ACQUISITIONS General 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 during the six months ended June 28, 2026 (the "2026 Acquisitions"). Acquisition-related costs associated with the 2026 Acquisitions were immaterial . Net sales included in the Company's condensed consolidated statements of income related to the 2026 Acquisitions were $ 1.8 million for both the three and six months ended June 28, 2026, and operating income was $ 0.3 million for both the three and six months ended June 28, 2026. 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 two acquisitions during the six months ended June 29, 2025. Acquisition-related costs associated with such acquisitions were immaterial . For the three and six months ended June 29, 2025, net sales included in the Company's condensed consolidated statements of income related to the acquisitions completed in the six months ended June 29, 2025 were $ 8.9 million and $ 13.2 million, respectively, and operating losses were $ 0.3 million and $ 0.4 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. 13 Table of Contents Changes in the contingent consideration liability are as follows: Three Months Ended Six Months Ended ($ in thousands) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Fair value at beginning of period $ 1,777 $ 3,792 $ 2,445 $ 3,608 Additions — — — 1,800 Fair value adjustments — — 1,098 ( 1,600 ) Settlements ( 16 ) ( 16 ) ( 1,782 ) ( 32 ) Fair value at end of period $ 1,761 $ 3,776 $ 1,761 $ 3,776 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) June 28, 2026 December 31, 2025 Accrued liabilities $ 1,161 $ 1,383 Other long-term liabilities 600 1,062 Total fair value of contingent consideration $ 1,761 $ 2,445 Maximum amount of contingent consideration $ 9,228 $ 9,343 2026 Acquisitions The Company completed two acquisitions during the six months ended June 28, 2026. Total cash consideration for the 2026 Acquisitions was approximately $ 7.0 million, plus a working capital holdback in connection with both acquisitions. As the Company finalizes the fair value of the acquired assets and assumed liabilities, additional purchase price adjustments may be recorded during the measurement period. Changes to preliminary purchase accounting estimates recorded during the three and six months ended June 28, 2026 related to the 2026 Acquisitions were immaterial. 2025 Acquisitions The Company completed five acquisitions during the year ended December 31, 2025 (the "2025 Acquisitions"). Total cash consideration for the 2025 Acquisitions was approximately $ 118.0 million, plus working capital holdbacks and contingent consideration over a less than two-year period based on future performance in connection with certain acquisitions. Purchase price allocations and all valuation activities in connection with two of the 2025 Acquisitions have been finalized. Changes to preliminary purchase accounting estimates recorded during the three and six months ended June 28, 2026 related to the 2025 Acquisitions were immaterial. 14 Table of Contents The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of each of the 2026 Acquisitions and 2025 Acquisitions: ($ in thousands) 2026 Acquisitions 2025 Acquisitions Consideration: Cash, net of cash acquired $ 6,952 $ 117,981 Working capital holdback and other, net 100 551 Contingent consideration (1) — 2,950 Total consideration $ 7,052 $ 121,482 Assets Acquired: Trade receivables $ 492 $ 8,976 Inventories 1,618 18,710 Prepaid expenses & other 44 471 Property, plant & equipment — 29,904 Operating lease right-of-use assets 99 1,119 Identifiable intangible assets: Customer relationships 2,700 20,790 Non-compete agreements — 1,600 Patents and developed technology — 5,230 Trademarks — 5,350 Liabilities Assumed: Current portion of operating lease obligations ( 80 ) ( 364 ) Accounts payable & accrued liabilities ( 857 ) ( 7,785 ) Operating lease obligations ( 19 ) ( 755 ) Total fair value of net assets acquired 3,997 83,246 Goodwill (2) 3,055 38,236 Total purchase price allocation $ 7,052 $ 121,482 (1) These amounts reflect the acquisition date fair value of contingent consideration based on expected future results relating to certain acquisitions. (2) Goodwill is tax-deductible for the 2026 Acquisitions and 2025 Acquisitions . 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. We estimate the value of customer relationships using the multi-period excess earnings method, which is a variation of the income approach, calculating the present value of incremental after-tax cash flows attributable to the asset. Non-compete agreements are valued using a discounted cash flow approach, which is a variation of the income approach, with and without the individual counterparties to the non-compete agreements. Trademarks and patents are valued using the relief-from-royalty method, which applies an estimated royalty rate to forecasted future cash flows, discounted to present value. The estimated useful life for customer relationships is 10 years. The average estimated useful life for non-compete agreements is 5 years. The estimated useful life for patents is 13 years, individually ranging from 10 to 18 years. Trademarks have an indefinite useful life. 15 Table of Contents Pro Forma Information (Unaudited) The following pro forma information for the three and six months ended June 28, 2026 and June 29, 2025 assumes the 2026 Acquisitions and 2025 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 2026 Acquisitions and 2025 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 zero and $ 0.5 million for the three and six months ended June 28, 2026, respectively, and $ 0.1 million and $ 1.0 million for the three and six months ended June 29, 2025, respectively. Three Months Ended Six Months Ended ($ in thousands, except per share data) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Revenue $ 1,041,704 $ 1,060,094 $ 2,041,175 $ 2,082,507 Net income $ 43,421 $ 32,945 $ 82,755 $ 71,199 Basic earnings per common share $ 1.36 $ 1.01 $ 2.57 $ 2.18 Diluted earnings per common share $ 1.28 $ 0.97 $ 2.36 $ 2.09 The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisitions been consummated as of the periods indicated above. NOTE 6. STOCK-BASED COMPENSATION The Company recorded stock-based compensation expense, net of forfeitures, of approximately $ 6.0 million and $ 12.0 million in the three and six months ended June 28, 2026, respectively, and $ 6.1 million and $ 11.3 million in the three and six months ended June 29, 2025, respectively. The Board approved various share grants under the Company’s 2009 Omnibus Incentive Plan for the six months ended June 28, 2026 totaling 183,643 shares in the aggregate at an average fair value of $ 127.20 per share at grant date for a total fair value at grant date of $ 23.4 million. Stock Appreciation Rights ("SARs"): On February 25, 2025, the Board approved the grant of 329,850 SARs divided into four tranches at exercise prices of $ 92.72 , $ 110.76 , $ 132.31 and $ 158.05 per share. The SARs vest pro-ratably over four years from the grant date and have nine-year contractual terms. The SARs are to be settled in shares of common stock or, at the sole discretion of the Board, in cash. As of June 28, 2026, the total remaining unrecognized cost was $ 3.5 million which will be expensed ratably over the four-year vesting period. Stock Options: On February 25, 2025, the Board approved the grant of 329,850 stock options at an exercise price per share of $ 92.72 . The stock options vest pro-rata over four years from the grant date and have nine-year contractual terms. As of June 28, 2026, the total remaining unrecognized cost was $ 4.9 million which will be expensed ratably over the four-year vesting period. 16 Table of Contents 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. The following are the assumptions that were used in calculating the fair value of stock options and SARs granted in February 2025: Expected term 9 years Expected volatility 24 % Risk-free interest rate 4.25 % Dividend yield 1.77 % NOTE 7. EARNINGS PER COMMON SHARE Earnings per common share are as follows: ($ and shares in thousands, except per share data) Three Months Ended Six Months Ended June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Numerator: Net income attributable to common shares $ 43,421 $ 32,436 $ 82,901 $ 70,674 Denominator: Weighted average common shares outstanding - basic 31,913 32,520 32,199 32,595 Weighted average impact of potentially dilutive convertible notes 1,275 903 1,575 984 Weighted average impact of potentially dilutive warrants 641 199 1,012 295 Weighted average impact of potentially dilutive securities 144 201 207 242 Weighted average common shares outstanding - diluted 33,973 33,823 34,993 34,116 Earnings per common share: Basic earnings per common share $ 1.36 $ 1.00 $ 2.57 $ 2.17 Diluted earnings per common share $ 1.28 $ 0.96 $ 2.37 $ 2.07 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. 17 Table of Contents NOTE 8. DEBT A summary of total debt outstanding is as follows: ($ in thousands) June 28, 2026 December 31, 2025 Long-term debt: Term loan due 2029 $ 115,625 $ 117,188 Revolver due 2029 205,000 75,000 1.75 % convertible notes due 2028 258,701 258,701 4.75 % senior notes due 2029 350,000 350,000 6.375 % senior notes due 2032 500,000 500,000 Total debt 1,429,326 1,300,889 Less: convertible notes deferred financing costs, net ( 2,425 ) ( 2,915 ) Less: term loan deferred financing costs, net ( 374 ) ( 430 ) Less: senior notes deferred financing costs, net ( 7,781 ) ( 8,473 ) Less: current maturities of long-term debt ( 6,250 ) ( 6,250 ) Total long-term debt, less current maturities, net $ 1,412,496 $ 1,282,821 As of June 28, 2026, 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 28, 2026 was the Secured Overnight Financing Rate (“SOFR”) plus 1.75 % (or 5.40 %) for the SOFR-based option. The fee payable on committed but unused portions of the Revolver due 2029 was 0.225 % as of June 28, 2026. Total cash interest paid was $ 31.5 million and $ 33.3 million for the three and six months ended June 28, 2026, respectively, and $ 32.9 million and $ 34.6 million for the three and six months ended June 29, 2025, respectively. Conditional Conversion Feature of the 1.75 % Convertible Senior Notes due 2028 As of June 28, 2026, 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, 2026 to September 30, 2026. 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 in each calendar quarter beginning with the quarter ended December 31, 2024 based on satisfying this condition in the respective prior calendar quarter. There were no conversions of the 1.75 % Convertible Notes during the period from January 1, 2026 to June 30, 2026. 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. 18 Table of Contents NOTE 9. FAIR VALUE MEASUREMENTS The following table presents fair values of certain assets and liabilities as of June 28, 2026 and December 31, 2025: June 28, 2026 December 31, 2025 ($ in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 1.75 % convertible notes due 2028 (1) $ — $ 389.1 $ — $ — $ 442.4 $ — 4.75 % senior notes due 2029 (1) $ — $ 342.6 $ — $ — $ 347.1 $ — 6.375 % senior notes due 2032 (1) $ — $ 497.0 $ — $ — $ 514.1 $ — Term loan due 2029 (1) (2) $ — $ 115.6 $ — $ — $ 117.2 $ — Revolver due 2029 (1) (2) $ — $ 205.0 $ — $ — $ 75.0 $ — Contingent consideration (3) $ — $ — $ 1.8 $ — $ — $ 2.4 (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 28, 2026 and December 31, 2025 at carrying value. (2) The carrying amounts of our term loan and revolving credit facility approximate fair value as of June 28, 2026 and December 31, 2025 based upon their terms and conditions in comparison to the terms and conditions of debt instruments with similar terms and conditions available at those dates. (3) The estimated fair value of the Company's contingent consideration is discussed further in Note 5 "Acquisitions". NOTE 10. INCOME TAXES The effective tax rate was 25.2 % and 25.3 % for the three months ended June 28, 2026 and June 29, 2025, respectively, and the effective tax rate for the comparable six month periods was 20.6 % and 21.4 %, respectively. For the three and six months ended June 28, 2026, effective 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 $ 0.6 million and $ 5.7 million, respectively. For the three and six months ended June 29, 2025, the impact of such excess tax benefits was immaterial and $ 3.0 million, respectively. Cash paid for income taxes, net of refunds, was $ 2.0 million and $ 2.9 million for the three and six months ended June 28, 2026, respectively, and $ 14.9 million and $ 22.3 million for the three and six months ended June 29, 2025, respectively. On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was signed into law. The OBBBA makes permanent many of the expired and expiring tax provisions originally enacted in the Tax Cuts and Jobs Act of 2017, including the immediate expensing of domestic research and development expenditures, more favorable business interest deductibility and 100 percent first-year bonus depreciation on qualifying property with effective dates in 2025. In accordance with Accounting Standards Codification (“ASC”) 740, “Income Taxes,” the Company has recognized the effects of the OBBBA during the current quarter for the provisions currently enacted, which has increased the Company’s deferred tax liability. The Company anticipates that the OBBBA will reduce its federal income tax liability and related tax payments for the current and future years but will not have a significant impact on its annual effective tax rate. NOTE 11. SEGMENT INFORMATION 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: laminated products utilized to produce furniture, shelving, walls and countertops; laminated and decorative surface products, including laminated panels, decorative and wrapped vinyls, paper-laminated panels, and vinyl printing; solid surface, granite and quartz countertops; fabricated aluminum products; hardwood profile mouldings; electrical systems components including instrument, digital switching, dash panels, digital displays and gauges; slide-out trim and fascia; cabinet products, doors, components and custom cabinetry; tooling for fiberglass boat manufacturers; fiberglass bath fixtures and tile systems; specialty bath and closet 19 Table of Contents building products; boat towers, tops, power bimini systems, trailers, frames and other engineered structural components; softwoods lumber; interior passage doors and baggage doors; wiring and wire harnesses; CNC molds and composite parts; aluminum and plastic fuel tanks; slotwall panels and components; RV painting; thermoformed shower surrounds; fiberglass and plastic components including front and rear caps and marine helms; polymer-based and other flooring; Marine hardware and accessories; air handling products; treated, untreated and laminated plywood; RV and marine furniture; adhesives and sealants; audio systems and accessories, including amplifiers, tower speakers, soundbars, and subwoofers; Marine non-slip foam flooring, padding, and accessories; protective covers for boats, RVs, aircraft, and military and industrial equipment; windshield and wiper systems; roofs/canopies; integrated door systems; fender flares and rear panels; composite panels; and other products. Distribution – The Company distributes pre-finished wall and ceiling panels; drywall and drywall finishing products; interior and exterior lighting products; wiring, electrical and plumbing products; transportation and logistics services; electronics and audio systems components; cement siding; raw and processed lumber; fiber reinforced polyester (“FRP”) products; interior passage doors; roofing products; laminate and ceramic flooring; shower doors; fireplaces and surrounds; appliances; tile; Marine hardware and accessories; RV awnings, windows, fiberglass siding and roofing; Marine windshields; RV air conditioning units and furniture; and other products in addition to providing transportation and logistics services. 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" included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026. 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. 20 Table of Contents The following tables summarize key financial information by segment: Three Months Ended June 28, 2026 ($ in thousands) Manufacturing Distribution Total Total net sales $ 806,923 $ 240,753 $ 1,047,676 Cost of goods sold 623,360 179,346 802,706 Gross profit $ 183,563 $ 61,407 $ 244,970 Operating expenses 80,153 39,793 119,946 Operating income $ 103,410 $ 21,614 $ 125,024 Reconciliation of reportable segment operating income to consolidated income before income tax: Selling, general and administrative 27,792 Amortization of intangible assets 23,720 Interest expense, net 18,978 Inter-segment elimination ( 3,523 ) Consolidated income before income taxes $ 58,057 Capital expenditures $ 17,412 $ 220 $ 17,632 Depreciation and amortization $ 36,398 $ 4,592 $ 40,990 Three Months Ended June 29, 2025 ($ in thousands) Manufacturing Distribution Total Total net sales $ 776,520 $ 277,488 $ 1,054,008 Cost of goods sold 597,232 205,314 802,546 Gross Profit $ 179,288 $ 72,174 $ 251,462 Operating expenses 76,165 39,756 115,921 Operating income $ 103,123 $ 32,418 $ 135,541 Reconciliation of reportable segment operating income to consolidated income before income tax: Selling, general and administrative 24,305 Amortization of intangible assets 24,515 Interest expense, net 18,869 Inter-segment elimination ( 1 ) Other expense 24,420 Consolidated income before income taxes $ 43,433 Capital expenditures $ 12,256 $ 8 $ 12,264 Depreciation and amortization $ 36,413 $ 4,559 $ 40,972 21 Table of Contents Six Months Ended June 28, 2026 ($ in thousands) Manufacturing Distribution Total Total net sales $ 1,586,941 $ 463,306 $ 2,050,247 Cost of goods sold 1,232,522 345,791 1,578,313 Gross profit $ 354,419 $ 117,515 $ 471,934 Operating expenses 156,168 75,623 231,791 Operating income $ 198,251 $ 41,892 $ 240,143 Reconciliation of reportable segment operating income to consolidated income before income tax: Selling, general and administrative 55,010 Amortization of intangible assets 47,662 Interest expense, net 37,366 Inter-segment eliminations ( 4,286 ) Consolidated income before income taxes $ 104,391 Capital expenditures $ 35,075 $ 483 $ 35,558 Depreciation and amortization $ 72,687 $ 9,190 $ 81,877 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 Inter-segment eliminations 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 22 Table of Contents A reconciliation of certain line items pertaining to the total reportable segments to the condensed consolidated financial statements for the three and six months ended June 28, 2026 and June 29, 2025, and as of June 28, 2026 and December 31, 2025 is as follows: Three Months Ended Six Months Ended ($ in thousands) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Net sales: Total sales for reportable segments $ 1,047,676 $ 1,054,008 $ 2,050,247 $ 2,062,581 Elimination of inter-segment sales ( 5,972 ) ( 6,454 ) ( 11,371 ) ( 11,607 ) Consolidated net sales $ 1,041,704 $ 1,047,554 $ 2,038,876 $ 2,050,974 Depreciation and amortization: Depreciation and amortization for reportable segments $ 40,990 $ 40,972 $ 81,877 $ 82,047 Corporate depreciation and amortization 2,023 1,637 3,913 3,208 Consolidated depreciation and amortization $ 43,013 $ 42,609 $ 85,790 $ 85,255 Capital expenditures: Capital expenditures for reportable segments $ 17,632 $ 12,264 $ 35,558 $ 30,375 Corporate capital expenditures — 6,011 1,000 8,071 Consolidated capital expenditures $ 17,632 $ 18,275 $ 36,558 $ 38,446 As of ($ in thousands) June 28, 2026 December 31, 2025 Total assets: Manufacturing segment assets $ 2,591,367 $ 2,476,411 Distribution segment assets 512,044 493,308 Corporate assets unallocated to segments 78,715 80,023 Cash and cash equivalents 29,160 26,432 Consolidated total assets $ 3,211,286 $ 3,076,174 The Company's revenue from external customers and long-lived assets are substantially all attributed to the U.S. NOTE 12. STOCK REPURCHASE PROGRAMS 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 June 28, 2026, Patrick had approximately $ 61.9 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: Three Months Ended Six Months Ended ($ in millions, except average price data) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Shares repurchased 980,000 277,849 1,107,678 377,612 Average price $ 93.31 $ 84.43 $ 95.82 $ 84.66 Aggregate cost $ 91.4 $ 23.5 $ 106.1 $ 32.0 23 Table of Contents NOTE 13. COMMITMENTS AND CONTINGENCIES The Company is subject to proceedings, lawsuits, audits, and other claims arising in the normal course of business. 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. These accruals are adjusted from time to time as developments warrant. Although the ultimate outcome of these matters cannot be ascertained, on the basis of present information, amounts already provided, availability of insurance coverage and legal advice received, it is the opinion of management that the ultimate resolution of these proceedings, lawsuits, and other claims will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. In the Company's Form 10-K for the year ended December 31, 2025, the Company described the current status of litigation concerning the Lusher Site Remediation Group. In early July 2023, the Court granted the Company’s Rule 54(b) Motion for Final Judgment on previously dismissed claims and granted the Company’s Motion to Dismiss the plaintiff’s remaining claims against the defendants, without prejudice (the Company’s Motion to Dismiss having been joined by the remaining defendants in the litigation.) The only remaining issue pending in the litigation for the Court’s determination is the plaintiff’s motion to bar contribution claims. The Company has also been named as a potentially responsible party for the related Lusher Street Groundwater Contamination Superfund Site (the "Superfund Site") by the U.S. Environmental Protection Agency (the "EPA"). There has been no change in the status of the proceedings as described in the 10-K for the year ended December 31, 2025, filed with the SEC on February 19, 2026. 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. 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. On or about May 1, 2026, three current employees filed a putative class action lawsuit against Patrick Industries, Inc. (the “Company”) in the U.S. District Court for the Northern District of Indiana, captioned Wilds, et al. v. Patrick Industries, Inc., Case No. 3:26-cv-00582. The plaintiffs brought the action individually and on behalf of a proposed class of participants and beneficiaries in the Company’s employee benefit plans. The complaint alleges that the Company imposed tobacco-related surcharges through a wellness program that did not comply with the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Public Health Service Act, and related regulations. The plaintiffs allege, among other claims, that the Company failed to provide a reasonable alternative standard, provided insufficient notices and disclosures, and breached certain fiduciary duties under ERISA. The litigation is in its early stages. At this time, the Company is unable to predict the outcome of the matter or reasonably estimate the amount or range of any potential loss. Accordingly, the Company has not recorded a liability related to this matter. NOTE 14. RELATED PARTY TRANSACTIONS On March 26, 2026, the Company acquired substantially all of the assets of Revel, LLC, d/b/a Red Rock Aluminum Products ("Revel") and Red Rock, LLC ("Red Rock") for total cash consideration of $ 7 million. Both companies serve the RV end market. Todd Cleveland, a member of the Company's Board of Directors, indirectly holds a majority interest in each of Revel and Red Rock; accordingly, the transaction is considered a related party transaction. The purchase price is expected to be allocated primarily to working capital, identifiable intangible assets and goodwill. See Note 5 "Acquisitions" for further details. Mr. Cleveland recused himself from all Board deliberations and approval of the transaction. The Audit Committee, composed solely of independent directors, reviewed and approved the transaction in accordance with the Company's procedures for evaluating related party transactions. 24 Table of Contents NOTE 15. SUBSEQUENT EVENTS On June 30, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with LCI Industries (“LCI”), Planet First Merger Sub Inc., a wholly owned subsidiary of the Company, and Planet Second Merger Sub LLC, a wholly owned subsidiary of the Company. The boards of directors of both the Company and LCI unanimously approved the Merger Agreement and the transactions contemplated thereby. Under the Merger Agreement, and subject to the satisfaction or waiver of customary closing conditions, LCI will merge with a subsidiary of the Company and ultimately become a wholly owned subsidiary of the Company. At the effective time of the merger, each issued and outstanding share of LCI common stock, par value $ 0.01 per share, other than certain excluded shares, will be converted into the right to receive 1.2440 shares of the Company’s common stock, no par value, plus cash in lieu of fractional shares. Following completion of the transaction, existing Company shareholders are expected to own approximately 52 % of the combined company, and existing LCI shareholders are expected to own approximately 48 %. The Merger Agreement also restricts the Company from repurchasing its common stock prior to the closing of the transaction. The transaction is subject to customary closing conditions, including shareholder approvals by both companies, regulatory approvals, effectiveness of a Form S-4 registration statement, Nasdaq approval of the shares to be issued, and other customary conditions. The transaction is expected to close in the first half of 2027. The Merger Agreement contains customary termination rights and provides for a termination fee of $ 94.2 million payable by either party under specified circumstances. For the three and six months ended June 28, 2026, the Company incurred $ 0.4 million of merger related costs in connection with the merger, which are included in Selling, general and administrative expenses in the Company's condensed consolidated statements of income. The merger has not been completed as of the date these unaudited condensed consolidated financial statements were issued.