Summary of Patrick Industries Q2 2026 Earnings Call

1Key Financial Results and Metrics

Net Sales: $1.04 billion, down less than 1% year-over-year.

Adjusted Earnings Per Share (EPS): $1.29, including $0.07 dilution from convertible notes.

Trailing 12-Month Net Sales: Approximately $3.9 billion.

Gross Margin: 23.8%, slightly down from 23.9% in Q2 2025.

Adjusted Operating Margin: 7.5%, down from 8.3% year-over-year.

Net Income: $43 million, up 34% from $32 million in the prior year.

Adjusted EBITDA: $126 million, compared to $135 million last year.

Cash Provided by Operations: $69 million in the first half of 2026, down from $189 million in the same period of 2025.

Available Liquidity: Approximately $691 million.

Net Leverage: Increased to 3.0x due to share repurchases and inventory investments.

2Strategic Updates and Business Highlights

End Market Performance:

RV Revenue: $407 million, down 15% year-over-year, impacted by a 16% decline in RV industry wholesale shipments.

Marine Revenue: Increased 22% to $191 million, outperforming industry trends.

Powersports Revenue: Grew 28% to $123 million, driven by demand for utility-focused units.

Housing Revenue: Up 2% to $320 million, reflecting stability in the industrial segment.

Merger Agreement: Patrick is in the process of merging with LCI Industries, expected to close in H1 2027, with anticipated cost synergies of $150 million.

Technological Investments: Introduction of advanced digital printing technology aimed at enhancing manufacturing efficiency and product offerings.

3Forward Guidance and Outlook

RV Market: Anticipates low double-digit decline in retail and wholesale shipments for 2026.

Marine Market: Expecting flat to slight decline in retail shipments, with low single-digit growth in wholesale shipments.

Powersports: Projecting mid-to-high single-digit growth for the year.

Housing: Forecasting low to mid-single-digit declines in manufactured housing shipments and new housing starts.

Adjusted Operating Margin: Expected to remain flat versus 2025, with potential additional margin pressure of 20 basis points due to pricing initiatives aimed at affordability.

4Bad News, Challenges, or Points of Concern

RV Market Weakness: Significant decline in RV revenue and shipments, with retail demand softer than expected.

Inventory Management: Elevated inventory levels and cautious production adjustments may affect cash flow and operational efficiency.

Macroeconomic Pressures: Higher fuel prices, interest rates, and lower consumer confidence are impacting discretionary spending.

Margin Pressure: Potential for further margin degradation due to pricing strategies aimed at addressing affordability issues.

5Notable Q&A Insights

Production Levels: Production is expected to decrease in the summer, with OEMs adjusting based on retail performance. There is cautious optimism regarding new model introductions.

Affordability Initiatives: The company is actively working with OEMs on pricing strategies to enhance affordability, which may lead to short-term margin sacrifices for long-term volume gains.

Market Dynamics: While RV shipments are down, there is a noted resilience in the Marine sector, particularly in mid to high-end products.

Commodity Costs: Commodity prices have stabilized, but there are concerns about potential increases in imported plywood costs due to tariffs. Overall, Patrick Industries is navigating a challenging market environment with strategic diversification efforts and a focus on partnerships to enhance customer value, while also preparing for potential headwinds in the RV segment.