Core Insights - Patrick Industries reported revenue of $975.63 million for Q3 2025, a year-over-year increase of 6.1% [1] - The EPS for the same period was $1.01, down from $1.20 a year ago, with a surprise of +6.32% compared to the consensus estimate of $0.95 [1] - The revenue exceeded the Zacks Consensus Estimate of $906.13 million by +7.67% [1] Revenue Performance by Market Type - Recreational Vehicle segment generated $426 million, surpassing the average estimate of $369 million, reflecting a year-over-year increase of +7.4% [4] - Housing segment reported $302 million, slightly below the average estimate of $308.5 million [4] - Powersports segment achieved $98 million, exceeding the average estimate of $92.5 million, with a year-over-year change of +12.1% [4] - Marine segment recorded $150 million, above the average estimate of $136.5 million, representing a +10.3% change year-over-year [4] Stock Performance - Shares of Patrick Industries have returned -3.9% over the past month, contrasting with the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 increased by 6% to $976 million, with organic growth contributing over 4% [19][33] - Earnings per diluted share was $1.01, including approximately $0.07 of dilution from convertible notes [19][34] - Total net liquidity at the end of the quarter was $779 million, with no major debt maturities until 2028 [20][35] Business Line Data and Key Metrics Changes - RV revenue increased by 7% to $426 million, representing 44% of consolidated revenue, with content per unit (CPU) on a trailing twelve-month basis at $5,055, up 3% year-over-year [25][34] - Marine revenues increased by 11% to $150 million, with estimated marine content per unit at $4,091, up 4% year-over-year [27][34] - Powersports revenue increased by 12% to $98 million, with growth across all powersports businesses [29][34] - Housing revenues were up 1% to $302 million, representing 31% of consolidated sales, with content per unit at $6,682, up 2% year-over-year [31][34] Market Data and Key Metrics Changes - Estimated RV retail unit shipments were approximately 100,100, with wholesale unit shipments around 76,500, indicating a seasonal dealer inventory destock [25][26] - Marine retail and wholesale powerboat unit shipments were estimated at 42,700 and 32,300 units respectively, with dealer inventory remaining lean at 16 to 18 weeks on hand [28][34] - Estimated MH wholesale unit shipments and total housing starts both decreased by 2% in the quarter [31][34] Company Strategy and Development Direction - The company is focused on investments in aftermarket and new product development, emphasizing model year prototyping and digital tools [21][24] - Strategic initiatives include acquisitions to strengthen the Patrick platform and modernizing processes and technology [21][24] - The company aims to drive growth through M&A, aftermarket expansion, and innovative product development [24][39] Management's Comments on Operating Environment and Future Outlook - Management noted the resilience of the business in a dynamic environment and the potential for upside when retail demand inflects [19][20] - The outlook for 2026 includes expectations for RV wholesale shipments to increase low to mid single digits and improvements in operating margins [39][40] - Management emphasized the importance of consumer confidence and lower interest rates for market recovery [40] Other Important Information - The company reported a decline in industry gross margin to 22.6% from 23.1% year-over-year, attributed to short-term inefficiencies [33][34] - The company has been actively working with supply chain partners to mitigate tariff impacts [36][34] Q&A Session Summary Question: Current production outlook from OEM customers - Management observed slight increases in production numbers from OEMs in October and November, indicating a potential ramp-up [44] Question: Update on aftermarket strategy and new SKUs - The company has integrated several hundred SKUs into the REC Pro platform and is looking to accelerate this process [46][48] Question: Clarification on operating margin expansion - Management indicated that sales leverage and content gains will drive margin improvements, alongside automation efforts [49][50] Question: Insights on dealer inventory levels - Management noted that current dealer inventory levels are low, indicating a need for restocking as the selling season approaches [68][96] Question: Thoughts on composite market opportunities - The company sees significant potential in the composite market, particularly in the RV sector, with a total addressable market estimated at $1.5 billion [76][128]

Core Insights - Patrick Industries reported quarterly earnings of $1.01 per share, exceeding the Zacks Consensus Estimate of $0.95 per share, but down from $1.2 per share a year ago, representing an earnings surprise of +6.32% [1] - The company achieved revenues of $975.63 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 7.67% and up from $919.44 million year-over-year [2] - Patrick Industries has outperformed the S&P 500, with shares increasing about 19% year-to-date compared to the S&P 500's gain of 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.67 on revenues of $835.53 million, and for the current fiscal year, it is $4.23 on revenues of $3.79 billion [7] - The estimate revisions trend for Patrick Industries was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Building Products - Mobile Homes and RV Builders industry is currently in the bottom 30% of the Zacks Industry Rank, which may negatively impact stock performance [8] - Another company in the same industry, Champion Homes, is expected to report quarterly earnings of $0.81 per share, reflecting a year-over-year decline of -12.9%, with revenues projected at $651.4 million, up 5.6% from the previous year [9][10]

Q3 2025 Financial Results - Net sales reached $976 million[5], a 6% increase year-over-year, driven by expansion in the Outdoor Enthusiast and Housing markets[15] - Adjusted EBITDA was $112 million with a margin of 11.5%[5] - Operating income amounted to $66 million, representing a margin of 6.8%[6] - Free cash flow year-to-date totaled $134 million[7] Revenue Breakdown by Market - RV revenue was $426 million, accounting for 44% of net sales[9], a 7% increase year-over-year[23] - Marine revenue reached $150 million, representing 15% of net sales[9], an 11% increase year-over-year[23] - Powersports revenue was $98 million, contributing 10% of net sales[9], a 12% increase year-over-year[23] - Housing revenue amounted to $302 million, making up 31% of net sales[9], a 1% increase year-over-year[23] Diversification and Growth - Total net sales for the trailing twelve months (TTM) reached $3873 million, a 66% increase compared to FY 2019[11] - Total RV revenue for TTM was $1742 million, a 35% increase compared to FY 2019[11] - Total Marine revenue for TTM was $578 million, a 76% increase compared to FY 2019[11] - Total Housing revenue for TTM was $1200 million, a 66% increase compared to FY 2019[11]

Financial Performance - Net sales increased by 6% to $976 million compared to $919 million in Q3 2024, driven by market-share gains and acquisitions [2]. - Operating income was $66 million, down from $74 million in the prior year, with an operating margin of 6.8%, a decrease of 130 basis points [4]. - Net income decreased to $35 million, or $1.01 per diluted share, compared to $41 million, or $1.20 per diluted share in Q3 2024 [3]. - Adjusted EBITDA was $112 million, down from $121 million in the same period last year, with an adjusted EBITDA margin of 11.5% compared to 13.2% [4]. - Net income for the nine months ended September 28, 2025, was $105,977 thousand, a decrease of 14.4% compared to $123,843 thousand for the same period in 2024 [21]. - Adjusted EBITDA for the nine months ended September 28, 2025, was $363,102 thousand, slightly up from $362,235 thousand in the prior year, reflecting a margin of 12.0% [28]. - Basic earnings per common share for the nine months ended September 28, 2025, was $3.26, down from $3.80 in the same period of 2024 [23]. - The operating margin for the nine months ended September 28, 2025, was 7.2%, down from 7.6% in the same period of 2024 [29]. Cash Flow and Liquidity - Cash flow from operating activities for the year-to-date was $199 million, down from $224 million in the prior year [4]. - Free cash flow for the trailing twelve months was $211 million, compared to $277 million in the prior year [4]. - Free cash flow for the trailing twelve months ended September 28, 2025, was $211,060 thousand, down from $277,211 thousand for the same period in 2024 [29]. - Cash and cash equivalents decreased to $20,698 thousand at the end of the period from $33,561 thousand at the beginning of the year, a decline of 38.3% [21]. Debt and Equity - Total debt at the end of Q3 was approximately $1.3 billion, resulting in a total net leverage ratio of 2.8x [8]. - The total shareholders' equity increased to $1,168,506 thousand as of September 28, 2025, from $1,128,366 thousand at December 31, 2024, reflecting a growth of 3.6% [20]. - Total current liabilities increased to $407,578 thousand as of September 28, 2025, compared to $353,615 thousand at December 31, 2024, marking a rise of 15.3% [20]. Strategic Initiatives - The company completed the acquisition of LilliPad Marine, enhancing its product offerings in the marine accessories market [5]. - The company expects to enhance execution of its profitable growth plan and improve margins in fiscal 2026 [9]. Investment Activities - The company reported a net cash used in investing activities of $136,895 thousand for the nine months ended September 28, 2025, compared to $485,401 thousand in the prior year [21]. Asset Growth - Total assets increased to $3,147,175 thousand as of September 28, 2025, up from $3,020,954 thousand at December 31, 2024, representing a growth of 4.2% [20].

Core Insights - Patrick Industries, Inc. will release its third quarter and nine months 2025 financial results on October 30, 2025, before market opening [1] - A conference call will be held on the same day at 10:00 a.m. Eastern Time to discuss the results, with participation limited to institutional investors and analysts [2] Company Overview - Patrick Industries, Inc. is a leading component solutions provider serving the RV, Marine, Powersports, and Housing markets, with a history dating back to 1959 [3] - The company employs approximately 10,000 skilled team members across the United States and is headquartered in Elkhart, IN [3] - Patrick Industries is home to over 85 leading brands, emphasizing quality, customer service, and innovation [3]

Core Insights - The article emphasizes the effectiveness of the Zacks Rank system in identifying winning stocks through earnings estimates and revisions [1] - Value investing is highlighted as a popular and successful strategy across various market conditions, focusing on undervalued stocks [2] Company Analysis: Patrick Industries (PATK) - Patrick Industries is currently rated with a Zacks Rank of 2 (Buy) and has received an "A" grade in the Value category, indicating it is among the strongest value stocks available [3] - The company has a PEG ratio of 1.21, which is lower than the industry average of 1.45, suggesting it may be undervalued relative to its expected earnings growth [4] - PATK's P/CF ratio stands at 11.91, which is also below the industry average of 14.33, further indicating potential undervaluation based on cash flow [5] - Overall, the metrics suggest that Patrick Industries is likely undervalued, making it an attractive value stock at this time [6]

Core Insights - Directors of companies often have valuable insights into their businesses, and significant insider purchases can indicate their confidence in the company's future performance [1] - Todd M. Cleveland, a director at Patrick Industries Inc, made notable insider purchases totaling $1.2 million over two transactions [1] Summary by Sections Insider Purchases - Todd M. Cleveland purchased 11,000 shares at $86.57 for a total of $952,259 on May 19, 2025, and 3,000 shares at $82.62 for $247,850 on June 3, 2025, averaging $85.72 per share [2] - The current trading price of Patrick Industries Inc shares is $109.36, reflecting a decrease of about 0.9% [2] Stock Performance - The 52-week range for Patrick Industries Inc shares is between $72.99 and $116.78, with the last trade at $109.36 [4] Dividends - Patrick Industries Inc pays an annualized dividend of $1.6 per share, distributed quarterly, with the most recent ex-dividend date on August 25, 2025 [5] - The current dividend yield is approximately 1.4% [5]

Core Viewpoint - U.S. small-cap stocks are experiencing significant performance gains, outperforming large-cap stocks, with expectations for further growth if the Federal Reserve cuts interest rates [1][2][6]. Small-Cap Stock Performance - The S&P Small Cap 600 Index has increased by 10.7% in the last three months and 4.1% over the past 30 days, while the S&P 500 Index has risen by 8.9% and 1.8% respectively [1]. - Small-cap stocks are more sensitive to economic conditions and interest rate changes, making them a focal point for potential investment opportunities [4][6]. Interest Rate Impact - A projected 0.25% cut in the federal funds rate is anticipated to benefit small-cap companies by lowering borrowing costs, which is crucial as these companies often rely on debt financing [2][3]. - Lower interest rates are expected to enhance earnings power for small-cap firms by reducing interest expenses [3]. Economic Growth and Small-Caps - If lower rates stimulate the economy and growth stabilizes or accelerates, small-cap stocks are likely to outperform as they typically do in the early to mid-stages of economic expansion [4][6]. - However, if rate cuts are a response to economic weakness, small-cap stocks may underperform due to their cyclical nature [6]. Notable Small-Cap Stocks - **Patrick Industries**: Year-to-date performance of 37.00%, expected to benefit from lower rates leading to volume growth and a successful M&A strategy [8]. - **Federal Signal**: Year-to-date performance of 38.00%, poised for growth due to lower borrowing rates for industrial customers and benefits from infrastructure spending [9][10]. - **LKQ Corporation**: Year-to-date performance of -10.42%, positioned to gain from increased demand for vehicle parts as consumers extend the life of their vehicles amid high prices [11][12]. Investment Strategies - The small-cap sector presents opportunities for value addition through mutual funds or active ETFs, especially as information asymmetry increases with smaller companies [13]. - Investors are advised to seek quality managers who focus on well-valued companies and maintain close relationships with company management for better monitoring [14].

Core Insights - Patrick Industries, Inc. will participate in Wells Fargo's 8th Annual Consumer Conference on September 16-17, 2025, in Dana Point, CA, where its management team will engage in one-on-one meetings with institutional investors and analysts [1]. Company Overview - Patrick Industries, Inc. is a leading component solutions provider for the RV, Marine, Powersports, and Housing markets, established in 1959. The company focuses on empowering manufacturers and outdoor enthusiasts to enhance recreation experiences [3]. - The company operates with a customer-focused approach that integrates design, manufacturing, distribution, and transportation, positioning itself as a trusted partner in the industry [3]. - Patrick Industries is headquartered in Elkhart, IN, and employs approximately 10,000 skilled team members across the United States [3].