Patrick Industries, Inc.

Second-quarter 2026 net sales were $1.04 billion, down less than 1% year over year. Adjusted EPS was $1.29, with about $0.07 of dilution from convertible notes and related warrants; reported diluted EPS was $1.28 versus $0.96 a year ago. Gross margin was 23.8% versus 23.9% in the prior-year quarter, while adjusted operating margin was 7.5% versus 8.3%, and adjusted EBITDA was $126 million versus $135 million last year. By end market, RV revenue was $407 million, down 15%; Marine revenue was $191 million, up 22%; Powersports revenue was $123 million, up 28%; and Housing revenue was $320 million, up 2%. For 2026, management now expects RV wholesale shipments of 285,000 to 300,000 units, Marine retail shipments flat to down slightly and wholesale shipments up low single digits, Powersports full-year unit shipments and organic content up low single digits, and MH wholesale unit shipments and total new housing starts down low to mid-single digits. The company raised its 2026 operating cash flow outlook to $320 million-$350 million, with capex of $70 million-$80 million and implied free cash flow of about $250 million; adjusted operating margin is expected to be flat versus 2025, with an additional possible 20 bps decline tied to customer affordability programs.

Andy Nemeth framed the quarter as evidence that Patrick’s diversified model is working, emphasizing that the company is “not defined by one cycle or end market.” He highlighted strategic investments in value engineering, advanced manufacturing, composites, electrical solutions, aftermarket, and AI-enabled tools, and said the company is using its scale to help OEMs address affordability and speed to market. His tone was constructive and opportunistic, especially around the second half, customer partnerships, and the pending LCI merger, for which he reiterated an expected $150 million of annual run-rate cost synergies.

Matt Filer emphasized that gross margin was held at 23.8% despite RV pressure, and that adjusted EBITDA was $126 million with a 12.1% margin. He said cash from operations for the first six months was $69 million versus $189 million last year due to working capital investment and elevated inventory, and noted liquidity of about $691 million, including $661 million of unused revolver capacity. He said net leverage was 3.0x at quarter-end, that the company returned about $106 million to shareholders in the quarter through $15 million of dividends and $91 million of repurchases, and that the stock buyback pace was constrained after the LCI merger agreement was signed.

Analysts focused on July RV demand, production into the model-year changeover, affordability initiatives, Marine content gains, Powersports growth, and inventory trends. Management said RV production is tracking down from first-half levels and that OEMs are balancing production with retail demand, while also using the second half to demonstrate affordability-focused partnerships that could lower margin by up to 20 bps but help drive volume and share. They also said Marine growth is being driven by solutions content such as towers, windshields, electrical, digital systems and SeaDek, while Powersports strength is coming from higher cabin-closure adoption and broader customer participation.