Summary of Patrick Industries Q1 2026 Earnings Call

1Key Financial Results and Metrics

Net Sales:: $997 million, up 1% year-over-year, with 8% organic growth offsetting a 10% decline in industry shipments.

Earnings Per Share (EPS):: $1.10, reflecting a 3% increase in net income to $39 million. EPS included approximately $0.10 dilution from convertible notes.

Gross Margin:: 22.8%, unchanged from Q1 2025.

Operating Margin:: 6.5%, flat year-over-year.

Adjusted EBITDA:: $113 million, down from $116 million in the prior year.

Cash Used in Operations:: $14 million, compared to cash provided of $40 million in Q1 2025, attributed to increased working capital.

Total Net Liquidity:: $734 million, with a net leverage ratio of 2.8x.

Shareholder Returns:: $31 million returned through dividends and share repurchases.

2Strategic Updates and Business Highlights

Market Performance::

RV revenue increased 7% to $446 million despite a 12% decline in wholesale unit shipments.

Marine revenue rose 14% to $170 million, outperforming a 7% reduction in wholesale Powerboat shipments.

Powersports revenue surged 28% to $104 million, driven by OEM adoption of new products.

Housing revenue was $277 million, up 6%, but faced challenges due to macroeconomic pressures.

Innovation Focus:: The company is enhancing its product offerings through the Advanced Product group, including new composite strategies and audio solutions.

M&A Activity:: Ongoing discussions regarding a potential merger with LCI Industries, while continuing to pursue other M&A opportunities.

3Forward Guidance and Outlook

2026 Estimates::

RV retail shipments expected to decline low to mid-single digits; wholesale shipments projected at 315,000 to 330,000 units.

Marine retail shipments expected to be flat; wholesale shipments anticipated to increase slightly.

Powersports unit shipments and organic content expected to rise low single digits.

Manufactured housing shipments projected to decline low to mid-single digits.

Financial Outlook:: Adjusted operating margin expected to improve by 30 to 50 basis points; operating cash flow estimated between $370 million and $390 million, with capital expenditures of $70 million to $80 million.

4Bad News, Challenges, or Points of Concern

Market Headwinds:: Retail demand is constrained by macroeconomic factors, including consumer confidence and interest rate uncertainties, particularly affecting the RV and manufactured housing markets.

Inventory Levels:: Dealer inventories are higher than the previous quarter but remain below historical averages, indicating cautious market conditions.

Manufactured Housing Decline:: Continued softness in the manufactured housing sector, with no significant improvement expected in the near term.

5Notable Q&A Insights

Retail Trends:: Retail conditions are gradually improving, with OEMs maintaining disciplined production levels in response to market demand.

Aftermarket Growth:: Significant cross-selling opportunities are emerging, particularly through the RecPro platform, which has added over 500 parts since acquisition.

M&A Strategy:: The company remains active in pursuing M&A opportunities independent of the potential merger with LCI Industries.

Tariff Management:: Patrick Industries has effectively mitigated tariff impacts through a flexible supply chain and close coordination with suppliers.

Content Growth Expectations:: The company anticipates continued organic growth in content per unit, supported by innovation and customer collaboration. Overall, Patrick Industries demonstrated resilience in a challenging market environment, with strong performance in certain segments and a proactive approach to innovation and M&A, while navigating macroeconomic uncertainties.