703343AB9

OVERVIEW This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the results of operations, financial condition and cash flows of Patrick Industries, Inc. This MD&A should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and Notes thereto included in Item 1 of this Report. In addition, this MD&A contains certain statements relating to future results which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. See “Information Concerning Forward-Looking Statements” on page 36 of this Report. The Company undertakes no obligation to update these forward-looking statements. EXECUTIVE SUMMARY Recent Events On June 30, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with LCI Industries (“LCI”) and two wholly owned merger subsidiaries 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 customary closing conditions, LCI will merge with subsidiaries of the Company and 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 transaction remains 25 Table of Contents subject to customary closing conditions, including shareholder and regulatory approvals, and has not been completed as of the date of this filing. In connection with the pending merger, the Company expects to incur additional transaction and integration-related costs, including legal, financial advisory, accounting, consulting, regulatory, filing and other related costs, some of which will be incurred regardless of whether the transaction is completed. The amount and timing of these costs cannot be estimated with certainty at this time and will depend on, among other things, the timing and outcome of required shareholder and regulatory approvals and integration planning. In addition, if the Merger Agreement is terminated under specified circumstances, the Company may be required to pay LCI a termination fee of $94.2 million. The Company expects to fund merger-related costs from cash on hand, cash from operations and/or borrowings under the revolving credit and term loan facility (the “2024 Credit Facility”). Overview of Markets and Related Industry Performance Three and Six Months Ended June 28, 2026 Financial Overview Recreational Vehicle ("RV") Industry The RV industry is the Company's primary market, and the Company’s RV products are sold primarily to major manufacturers of RVs, smaller original equipment manufacturers ("OEMs"), and to a lesser extent, manufacturers in adjacent industries. The principal types of recreational vehicles include (1) towables: conventional travel trailers, fifth wheels, folding camping trailers, and truck campers; and (2) motorized: class A (large motor homes), class B (van campers), and class C (small-to-mid size motor homes). Net sales to the RV industry were 39% and 42% of the Company's net sales for the three and six months ended June 28, 2026, respectively, and 46% and 47% for the three and six months ended June 29, 2025, respectively. Net sales to the RV industry decreased 15% and 11% for the three and six months ended June 28, 2026, respectively, compared to the prior year periods. According to the RV Industry Association ("RVIA"), RV wholesale unit shipments for the three months ended June 28, 2026 totaled approximately 77,600 units, a decrease of 16% compared to approximately 92,900 units for the three months ended June 29, 2025. We estimate that RV industry retail unit sales decreased 12% for the three months ended June 28, 2026 compared to the prior year period. Retail unit sales exceeded wholesale unit shipments in the three months ended June 28, 2026 as RV OEMs maintained lower production volumes. According to the RVIA, RV wholesale unit shipments for the first six months of 2026 totaled approximately 163,600 units, a decrease of 14% from approximately 190,700 units for the first six months of 2025. While we estimate RV industry retail unit sales for the first six months of 2026 decreased by approximately 14% compared to the first six months of 2025, we estimate that wholesale unit shipments exceeded retail unit sales during the period, reflecting lower retail demand and a modest increase in dealer inventory levels. Marine Industry The Company’s sales to the marine industry are primarily focused on the powerboat sector of the market which is comprised of four main categories: fiberglass, aluminum fishing, pontoon and ski & wake. Net sales to the marine industry were 18% of the Company's net sales for both the three and six months ended June 28, 2026, and 15% for both the three and six months ended June 29, 2025. Net sales to the marine industry increased 22% and 18% in the three and six months ended June 28, 2026, respectively, compared to the prior year periods. 26 Table of Contents Our marine revenue is generally correlated to marine industry wholesale powerboat unit shipments. According to Company estimates based on data published by the National Marine Manufacturers Association ("NMMA"), wholesale powerboat unit shipments remained flat and decreased 2% for the three and six months ended June 28, 2026, respectively, compared to the prior year periods. We estimate that marine industry retail powerboat unit sales decreased 6% and 5% for the three and six months ended June 28, 2026, respectively, compared to the prior year periods, primarily due to the current macroeconomic environment faced by the end consumer, such as economic uncertainty and volatile oil prices. Powersports Industry Powersports is a category of motorsports which includes vehicles such as motorcycles, all-terrain vehicles ("ATVs"), side-by-sides, snowmobiles, scooters, golf carts and other personal transportation vehicles, and other related categories. Our powersports business is primarily focused on the utility and premium segments of the side-by-side market, which have been outperforming the more discretionary recreational segment. We also participate in the motorcycle and golf cart segments of the market. OEMs and dealers are actively managing field inventory levels to align dealer inventories with retail demand. Net sales to the powersports industry were 12% and 11% of the Company's net sales for the three and six months ended June 28, 2026, respectively, and 9% for both the three and six months ended June 29, 2025. Net sales to the powersports industry increased 28% for both the three and six months ended June 28, 2026 compared to the prior year periods. Manufactured Housing ("MH") Industry The Company’s products for this market are sold primarily to major manufacturers of manufactured homes, other OEMs, and to a lesser extent, manufacturers in adjacent industries. Factors that may favorably impact demand in this industry include jobs growth, consumer confidence, favorable changes in financing regulations, a narrowing in the difference between interest rates on MH loans and mortgages on traditional residential "site-built" housing, and any improvement in conditions in the asset-backed securities markets for manufactured housing loans. Net sales to the MH industry were 17% and 16% of the Company's net sales for the three and six months ended June 28, 2026, respectively, and 17% for both the three and six months ended June 29, 2025. Net sales to the MH industry decreased 4% and 7% for the three and six months ended June 28, 2026, respectively, compared to the prior year periods. According to Company estimates based on industry data from the Manufactured Housing Institute, MH industry wholesale unit shipments decreased 8% in both the three and six months ended June 28, 2026 compared to the prior year periods. Industrial Market The industrial market is comprised primarily of U.S. residential housing market and non-housing market categories and includes kitchen cabinet, countertop, hospitality, retail and commercial fixtures, and office and household furniture markets and regional distributors. Net sales to the industrial market were 14% and 13% of the Company's net sales for the three and six months ended June 28, 2026, respectively, and 13% and 12% for the three and six months ended June 29, 2025, respectively. Net sales to the industrial market increased 9% and 5% for the three and six months ended June 28, 2026, respectively, compared to the prior year periods. Based on U.S. Census Bureau data, combined new housing starts decreased 1% for the second quarter of 2026 compared to the prior year period, reflecting an increase in multifamily housing starts of 8% and a decrease in single-family housing starts of 4%. For the first six months of 2026, combined new housing starts increased 1% compared to the prior year period, reflecting a decrease in single-family housing starts of 5% and an increase in multifamily housing starts of 15%. Our industrial products are generally among the last components installed in new unit construction and as such our related sales typically trail new housing starts by four to six months. 27 Table of Contents RESULTS OF OPERATIONS Three and Six Months Ended June 28, 2026 Compared to 2025 The following table sets forth the percentage relationship to net sales of certain items on the Company’s Condensed Consolidated Statements of Income. Three Months Ended Amount Change % Change ($ in thousands) June 28, 2026 June 29, 2025 Net sales $ 1,041,704 100.0 % $ 1,047,554 100.0 % $ (5,850) (1) % Cost of goods sold 794,129 76.2 % 796,922 76.1 % (2,793) — % Gross profit 247,575 23.8 % 250,632 23.9 % (3,057) (1) % Warehouse and delivery expenses 50,608 4.9 % 46,075 4.4 % 4,533 10 % Selling, general and administrative expenses 96,188 9.2 % 93,206 8.9 % 2,982 3 % Amortization of intangible assets 23,744 2.3 % 24,629 2.4 % (885) (4) % Operating income 77,035 7.4 % 86,722 8.3 % (9,687) (11) % Interest expense, net 18,978 1.8 % 18,869 1.8 % 109 1 % Other expenses — — % 24,420 2.3 % (24,420) (100) % Income taxes 14,636 1.4 % 10,997 1.0 % 3,639 33 % Net income $ 43,421 4.2 % $ 32,436 3.1 % $ 10,985 34 % Six Months Ended Amount Change % Change ($ in thousands) June 28, 2026 June 29, 2025 Net sales $ 2,038,876 100.0 % $ 2,050,974 100.0 % $ (12,098) (1) % Cost of goods sold 1,564,441 76.7 % 1,571,751 76.6 % (7,310) — % Gross profit 474,435 23.3 % 479,223 23.4 % (4,788) (1) % Warehouse and delivery expenses 95,640 4.7 % 90,657 4.4 % 4,983 5 % Selling, general and administrative expenses 189,284 9.3 % 187,137 9.1 % 2,147 1 % Amortization of intangible assets 47,754 2.3 % 49,138 2.4 % (1,384) (3) % Operating income 141,757 7.0 % 152,291 7.4 % (10,534) (7) % Interest expense, net 37,366 1.8 % 37,981 1.9 % (615) (2) % Other expenses — — % 24,420 1.2 % (24,420) (100) % Income taxes 21,490 1.1 % 19,216 0.9 % 2,274 12 % Net income $ 82,901 4.1 % $ 70,674 3.4 % $ 12,227 17 % Net Sales. Net sales decreased $5.9 million, or 1%, to $1.04 billion for the three months ended June 28, 2026 compared to $1.05 billion for the three months ended June 29, 2025. The decrease was driven by lower sales to the RV and MH markets, partially offset by increased sales to the marine, powersports and industrial markets. Sales to the RV market decreased $72.3 million, or 15%, compared to the prior year period, primarily due to a decrease in wholesale unit shipments of approximately 16%. Sales to the MH market decreased $7.3 million, or 4%, compared to the prior year period, primarily due to a decrease in estimated MH industry wholesale unit shipments of approximately 8%. Sales to the marine market increased $34.9 million, or 22%, primarily attributable to incremental sales from acquisitions completed in the prior year and organic growth. Sales to the powersports market increased $26.7 million, or 28%, compared to the prior year period, primarily reflecting higher attachment rates on premium utility vehicles compared to the prior year period. Sales to the industrial market increased $12.1 million, or 9%, compared to the prior year period, which is attributable to market share gains and product mix shifts by certain customers. 28 Table of Contents Net sales for the first six months of 2026 decreased $12.1 million, or 1%, to $2.04 billion compared to $2.05 billion for the first six months of 2025. The decrease was driven by lower sales to the RV and MH markets, partially offset by increased sales to the marine, powersports and industrial markets. Sales to the RV market decreased $104.7 million, or 11%, compared to the first six months of 2025, due to a decrease in RV wholesale unit shipments of 14%. Sales to the MH market decreased $25.9 million, or 7%, compared to the first six months of 2025, primarily due to a decrease in estimated MH industry wholesale unit shipments of approximately 8%. Sales to the marine market increased $55.7 million, or 18%, compared to the first six months of 2025, primarily attributable to incremental sales from acquisitions completed in 2025 and organic growth. Sales to the powersports market increased $49.4 million, or 28%, compared to the first six months of 2025, primarily reflecting higher attachment rates on premium utility vehicles compared to the prior year period. Sales to the industrial market increased $13.4 million, or 5%, compared to the first six months of 2025, primarily related to product mix shifts by certain customers. Revenue attributable to acquisitions completed in the first six months of 2026 was $1.8 million for both the three and six months ended June 28, 2026. Revenue attributable to acquisitions completed in the first six months of 2025 were $8.9 million and $13.2 million for the three and six months ended June 29, 2025, respectively. Cost of Goods Sold. Cost of goods sold decreased $2.8 million, or less than 1%, to $794.1 million for the three months ended June 28, 2026 compared to $796.9 million for the three months ended June 29, 2025. As a percentage of net sales, cost of goods sold increased 10 basis points in the three months ended June 28, 2026 to 76.2% compared to 76.1% in the prior year period. Cost of goods sold decreased $7.3 million, or less than 1%, to $1.56 billion for the first six months of 2026 compared to $1.57 billion for the first six months of 2025. As a percentage of net sales, cost of goods sold increased 10 basis points for the first six months of 2026 to 76.7% compared to 76.6% for the first six months of 2025. For the three months ended June 28, 2026, cost of goods sold as a percentage of net sales increased as a result of increased material and overhead costs, partially offset by continued cost reduction and automation initiatives we deployed throughout 2025 and into 2026 that had a positive impact on labor. Cost of goods sold as a percentage of net sales increased for the first six months of 2026 primarily as a result of increased overhead costs, partially offset by decreased material costs and continued cost reduction and automation initiatives we deployed throughout 2025 and into 2026 that had a positive impact on labor. Gross Profit. Gross profit decreased $3.1 million, or 1%, to $247.6 million for the three months ended June 28, 2026 compared to $250.6 million for the three months ended June 29, 2025. As a percentage of net sales, gross profit decreased 10 basis points to 23.8% for the three months ended June 28, 2026 compared to prior year period. Gross profit decreased $4.8 million, or 1%, to $474.4 million for the first six months of 2026 compared to $479.2 million in the prior year period. As a percentage of net sales, gross profit decreased 10 basis points to 23.3% for the first six months of 2026 compared to 23.4% for the prior year period. The change in gross profit as a percentage of net sales in the second quarter and first six months of 2026 compared to the same periods in 2025 reflects the impact of the factors discussed above under "Cost of Goods Sold". Warehouse and Delivery Expenses. Warehouse and delivery expenses increased $4.5 million, or 10%, to $50.6 million for the three months ended June 28, 2026 compared to $46.1 million for the three months ended June 29, 2025. As a percentage of net sales, warehouse and delivery expenses increased 50 basis points to 4.9% for the three months ended June 28, 2026 compared to 4.4% for the three months ended June 29, 2025. 29 Table of Contents Warehouse and delivery expenses increased $5.0 million, or 5%, to $95.6 million for the first six months of 2026 compared to $90.7 million for the prior year period. As a percentage of net sales, warehouse and delivery expenses increased 30 basis points to 4.7% for the first six months of 2026 compared to 4.4% for the first six months of 2025. The increase in warehouse and delivery expenses and increase as a percentage of net sales for the three and six months ended June 28, 2026 compared to the same periods in 2025 is primarily related to higher fuel and freight costs. Selling, General and Administrative ("SG&A") Expenses. SG&A expenses increased $3.0 million, or 3%, to $96.2 million for the three months ended June 28, 2026 compared to $93.2 million for the three months ended June 29, 2025. The increase in SG&A expenses for the three months ended June 28, 2026 compared to the prior year period is primarily related to increased professional fees, wages, technology expenses, incentive compensation and selling expenses, partially offset by increased gain on sale of assets and decreased insurance expenses. As a percentage of net sales, SG&A expenses increased 30 basis points to 9.2% for the three months ended June 28, 2026 compared to 8.9% in the prior year period. The increase in SG&A expenses as a percentage of net sales for the three months ended June 28, 2026 is primarily attributable to increased professional fees and technology expenses. SG&A expenses increased $2.1 million, or 1%, to $189.3 million for the first six months of 2026 compared to $187.1 million in the prior year period. The increase in SG&A expenses for the first six months of 2026 compared to 2025 is primarily attributable to increased professional fees and incentive compensation, partially offset by an increased gain on sale of assets and decreased wages, insurance and selling expenses. As a percentage of net sales, SG&A expenses increased 20 basis points to 9.3% for the first six months of 2026 compared to 9.1% in the prior year period. The increase in SG&A expenses as a percentage of net sales for the first six months of 2026 is primarily attributable to increased professional fees and incentive compensation, partially offset by decreased insurance related costs and an increased gain on sale of fixed assets. Amortization of Intangible Assets. Amortization of intangible assets decreased $0.9 million, or 4%, to $23.7 million for the three months ended June 28, 2026 compared to $24.6 million for the three months ended June 29, 2025. Amortization of intangible assets decreased $1.4 million, or 3%, to $47.8 million for the first six months of 2026 compared to $49.1 million in the prior year period. The decrease in amortization of intangible assets for the three and six months ended June 28, 2026 compared to the prior year periods primarily reflects certain intangible assets that were fully amortized in the prior year. Operating Income. Operating income decreased $9.7 million, or 11%, to $77.0 million for the three months ended June 28, 2026 compared to $86.7 million for the three months ended June 29, 2025. As a percentage of net sales, operating income decreased to 7.4% compared to 8.3% for the prior year period. The decrease in operating income and operating income as a percentage of net sales is primarily attributable to the items discussed above. Operating income decreased $10.5 million to $141.8 million for the first six months of 2026 compared to $152.3 million in the prior year period. Operating income as a percentage of net sales decreased to 7.0% for the first six months of 2026 compared to 7.4% for the first six months of 2025. The decrease in operating income and operating income as a percentage of net sales is primarily attributable to the items discussed above. Interest Expense, Net. Interest expense increased $0.1 million, or 1%, to $19.0 million for the three months ended June 28, 2026 compared to $18.9 million for the three months ended June 29, 2025. Interest expense decreased $0.6 million, or 2%, to $37.4 million for the first six months of 2026 compared to $38.0 million for the first six months of 2025. Other Expenses. Other expenses were zero for the three and six months ended June 28, 2026. Other expenses were $24.4 million for the three and six months ended June 29, 2025, reflecting expenses related to a legal settlement. 30 Table of Contents Income Taxes. Income tax expense increased $3.6 million for the three months ended June 28, 2026, to $14.6 million, compared to $11.0 million for the three months ended June 29, 2025. Income tax expense increased $2.3 million for the first six months of 2026 to $21.5 million compared to $19.2 million in the prior year period. The effective tax rate was 25.2% and 20.6% in the three and six months ended June 28, 2026, respectively, and 25.3% and 21.4% in the three and six months ended June 29, 2025, respectively. The increase in income tax expense for the three and six months ended June 28, 2026 compared to the three and six months ended June 29, 2025 primarily reflects higher income before tax, partially offset by higher excess tax benefits related to share-based compensation. SEGMENT REPORTING The Company's reportable segments, Manufacturing and Distribution, are based on its method of internal reporting. The Company regularly evaluates the performance of the Manufacturing and Distribution segments and allocates resources to them based on a variety of indicators including sales, gross profit and operating income. The Company does not measure profitability at the customer end market (RV, marine, powersports, MH and industrial) level. Three and Six Months Ended June 28, 2026 Compared to 2025 General In the discussion that follows, sales attributable to the Company’s reportable segments include inter-segment sales and gross profit includes the impact of inter-segment operating activity. The table below presents information about the sales, gross profit and operating income of the Company’s reportable segments. A reconciliation of consolidated net sales and operating income is presented in Note 11 "Segment Information" of the Notes to Condensed Consolidated Financial Statements. Three Months Ended Amount Change % Change ($ in thousands) June 28, 2026 June 29, 2025 Sales Manufacturing $ 806,923 $ 776,520 $ 30,403 4% Distribution $ 240,753 $ 277,488 $ (36,735) (13)% Gross Profit Manufacturing $ 183,563 $ 179,288 $ 4,275 2% Distribution $ 61,407 $ 72,174 $ (10,767) (15)% Operating Income Manufacturing $ 103,410 $ 103,123 $ 287 —% Distribution $ 21,614 $ 32,418 $ (10,804) (33)% 31 Table of Contents Six Months Ended Amount Change % Change ($ in thousands) June 28, 2026 June 29, 2025 Sales Manufacturing $ 1,586,941 $ 1,531,007 $ 55,934 4% Distribution $ 463,306 $ 531,574 $ (68,268) (13)% Gross Profit Manufacturing $ 354,419 $ 348,679 $ 5,740 2% Distribution $ 117,515 $ 133,875 $ (16,360) (12)% Operating Income Manufacturing $ 198,251 $ 201,244 $ (2,993) (1)% Distribution $ 41,892 $ 57,418 $ (15,526) (27)% Manufacturing Sales. Manufacturing segment sales increased $30.4 million, or 4%, to $806.9 million for the three months ended June 28, 2026 compared to $776.5 million for the three months ended June 29, 2025. For the first six months of 2026, sales increased $55.9 million, or 4%, to $1.59 billion compared to $1.53 billion in the prior year period. The manufacturing segment accounted for approximately 77% and 74% of the Company’s sales for the three months ended June 28, 2026 and June 29, 2025, respectively, and approximately 77% and 74% of the Company’s sales for the six months ended June 28, 2026 and June 29, 2025, respectively. Manufacturing segment sales increased for the three months ended June 28, 2026 due to higher sales to the marine, powersports and industrial markets, partially offset by decreased sales to the RV and MH markets. Sales to the marine market increased $34.4 million, or 24%, compared to the prior year period, attributable to incremental sales from acquisitions completed in the prior year and organic growth. Sales to the powersports market increased $25.4 million, or 28%, compared to the prior year period, primarily reflecting higher attachment rates on premium utility vehicles compared to the prior year period. Sales to the industrial market increased $12.4 million, or 10%, compared to the prior year period due to market share gains and product mix shifts by certain customers. Sales to the RV market decreased $40.2 million, or 12%, compared to the prior year period, primarily due to a decrease in estimated RV industry wholesale unit shipments of approximately 16%. Sales to the MH market decreased $1.1 million, or 1%, compared to the prior year period. Manufacturing segment sales increased for the first six months of 2026 compared to the same prior year period due to increased sales to the marine, powersports, and industrial markets, partially offset by decreased sales to the RV and MH markets. Sales to the marine market increased $55.5 million, or 20%, compared to the prior year period, primarily attributable to incremental sales from acquisitions completed in the prior year and organic growth. Sales to the powersports market increased $46.7 million, or 28% compared to the prior year period, primarily reflecting higher attachment rates on premium utility vehicles compared to the prior year period. Sales to the industrial market increased $14.5 million, or 6%, compared to the prior year period, primarily due to market share gains and product mix shifts of certain customers. Sales to the RV market decreased $54.4 million, or 8%, compared to the prior year period, primarily attributable to a decrease in estimated wholesale unit shipments of 14%, partially offset by market share gains. Sales to the MH market decreased $6.1 million, or 4%, compared to the prior year period, primarily due to a decrease in estimated MH industry wholesale unit shipments of approximately 8%, partially offset by market share gains. Manufacturing segment sales attributable to acquisitions completed in the first six months of 2026 were $0.8 million for both the three and six months ended June 28, 2026. Manufacturing segment sales attributable to acquisitions completed in the first six months of 2025 were $8.9 million and $13.2 million for the three and six months ended June 29, 2025, respectively. 32 Table of Contents Gross Profit. Manufacturing segment gross profit increased $4.3 million, or 2%, to $183.6 million for the three months ended June 28, 2026 compared to $179.3 million for the three months ended June 29, 2025. As a percentage of sales, gross profit decreased 40 basis points to 22.7% for the three months ended June 28, 2026 compared to 23.1% for the three months ended June 29, 2025. The decrease in gross profit as a percentage of sales for the three months ended June 28, 2026 compared to the prior year period is attributable to increased labor and manufacturing overhead costs as a percentage of sales, partially offset by decreased material costs as a percentage of sales. Manufacturing segment gross profit increased $5.7 million, or 2%, to $354.4 million in the first six months of 2026 compared to $348.7 million in the first six months of 2025. As a percentage of sales, gross profit decreased 50 basis points to 22.3% in the first six months of 2026 compared to 22.8% in the prior year period. The decrease in gross profit as a percentage of sales in the first six months of 2026 compared to the same period in 2025 is attributable to increased labor and overhead costs as a percentage of sales, partially offset by decreased material costs as a percentage of sales. Operating Income. Operating income increased $0.3 million, or less than 1%, to $103.4 million for the three months ended June 28, 2026 compared to $103.1 million for the three months ended June 29, 2025. As a percentage of sales, operating income decreased 50 basis points to 12.8% for the three months ended June 28, 2026 compared to 13.3% for the three months ended June 29, 2025. The increase in operating income is primarily attributable to the items discussed above, partially offset by an increase in operating expenses. The decrease in operating income as a percentage of sales is primarily related to the items discussed above combined with an increase in operating expenses as a percentage of sales. Operating income decreased $3.0 million, or 1%, to $198.3 million for the first six months of 2026 compared to $201.2 million in the prior year period. As a percentage of sales, operating income decreased 60 basis points to 12.5% in the first six months of 2026 compared to 13.1% in the prior year period. The decrease in operating income and operating income as a percentage of sales is primarily attributable to the items discussed above combined with an increase in operating expenses and operating expenses as a percentage of sales. Distribution Sales. Distribution segment sales decreased $36.7 million, or 13%, to $240.8 million for the three months ended June 28, 2026 compared to $277.5 million for the three months ended June 29, 2025. For the first six months of 2026, sales decreased $68.3 million, or 13%, to $463.3 million compared to $531.6 million in the prior year period. The distribution segment accounted for approximately 23% and 26% of the Company’s sales for the three months ended June 28, 2026 and June 29, 2025, respectively, and approximately 23% and 26% of the Company’s sales for the six months ended June 28, 2026 and June 29, 2025, respectively. Distribution segment sales decreased for the three months ended June 28, 2026 compared to the prior year period due to lower sales to the RV, MH and industrial markets, partially offset by increased sales to the powersports and marine markets. Sales to the RV market decreased $32.1 million, or 22%, compared to the prior year period, primarily attributable to a decrease in estimated RV industry wholesale unit shipments of approximately 16% and product mix shifts by certain customers. Sales to the MH market decreased $6.2 million, or 6%, compared to the prior year period, primarily due to a decrease in estimated MH industry wholesale unit shipments of approximately 8%. Sales to the industrial market decreased $0.2 million, or 2%, compared to the prior year period. Sales to the powersports market increased $1.2 million, or 27%, compared to the prior year period. Sales to the marine market increased $0.5 million, or 4%, compared to the prior year period. Distribution segment sales decreased for the first six months of 2026 compared to the first six months of 2025 due to lower sales to the RV, MH and industrial markets, partially offset by increased sales to the powersports and marine markets. Sales to the RV market decreased $50.3 million, or 18%, compared to the first six months of 2025, due to a decrease in estimated RV industry wholesale unit shipments of approximately 14% and product mix shifts by certain customers. Sales to the MH market decreased $19.9 million, or 10%, compared to the first six months of 2025, primarily due to a decrease in estimated MH industry wholesale unit shipments of approximately 8%. Sales to the industrial market decreased $1.0 million, or 5%, compared to the first six months of 2025. Sales to the powersports market increased $2.6 million, or 31%, compared to the first six months of 2025, primarily reflecting higher attachment rates on premium utility vehicles compared to the prior year period. Sales to the marine market increased $0.2 million, or 1%, compared to the first six months of 2025. 33 Table of Contents Distribution segment sales attributable to acquisitions completed in the first six months of 2026 were $1.0 million in both the three and six months ended June 28, 2026. Gross Profit. Distribution segment gross profit decreased $10.8 million, or 15%, to $61.4 million for the three months ended June 28, 2026 compared to $72.2 million for the three months ended June 29, 2025. As a percentage of sales, gross profit decreased 50 basis points to 25.5% for the three months ended June 28, 2026 compared to 26.0% in the prior year period. The decrease in gross profit as a percentage of sales for the three months ended June 28, 2026 compared to the prior year period is attributable to increased material costs as a percentage of sales, partially offset by decreased labor and manufacturing overhead costs as a percentage of sales. Distribution segment gross profit decreased $16.4 million, or 12%, to $117.5 million for the first six months of 2026 compared to $133.9 million for the first six months of 2025. As a percentage of sales, gross profit increased 20 basis points to 25.4% for the first six months of 2026 compared to 25.2% in the prior year period. The increase in gross profit as a percentage of sales for the first six months of 2026 compared to the prior year period is attributable to decreased labor and manufacturing overhead costs as a percentage of sales, partially offset by increased material costs as a percentage of sales. Operating Income. Operating income decreased $10.8 million, or 33%, to $21.6 million for the three months ended June 28, 2026 compared to $32.4 million for the three months ended June 29, 2025. As a percentage of sales, operating income decreased 270 basis points to 9.0% for the three months ended June 28, 2026 compared to 11.7% in the same period in 2025. The decrease in operating income and operating income as a percentage of sales is primarily related to the items discussed above combined with higher operating expenses and operating expenses as a percentage of sales compared to the prior year period. Operating income decreased $15.5 million, or 27%, to $41.9 million in the first six months of 2026 compared to $57.4 million in the prior year period. As a percentage of sales, operating income decreased 180 basis points to 9.0% in the first six months of 2026 compared to 10.8% in the same period in 2025. The decrease in operating income and operating income as a percentage of sales primarily reflect the items discussed above, as well as an increase in operating expenses and operating expenses as a percentage of sales. LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of liquidity are cash flows from operations, available cash reserves and borrowing capacity available under the 2024 Credit Facility, as discussed in Note 8 "Debt" of the Notes to Condensed Consolidated Financial Statements. Our liquidity as of June 28, 2026 consisted of cash and cash equivalents of $29.2 million and $661.4 million of availability under the 2024 Credit Facility, net of $8.6 million of outstanding letters of credit. As of June 28, 2026, the Company's existing cash and cash equivalents, cash generated from operations, and available borrowings under the 2024 Credit Facility are expected to be sufficient to meet anticipated cash needs for working capital and capital expenditures for at least the next 12 months, exclusive of any acquisitions, based on the Company's current cash flow budgets and forecast of short-term and long-term liquidity needs. Principal uses of cash are to support working capital demands, meet debt service requirements and support the Company's capital allocation strategy, which includes acquisitions, capital expenditures, dividends and repurchases of the Company’s common stock, among others. Working capital requirements vary from period to period depending on manufacturing volumes primarily related to the RV, marine, powersports, MH and industrial markets we serve, the timing of deliveries, and the payment cycles of customers. In the event that operating cash flow is inadequate and one or more of the Company's capital resources were to become unavailable, the Company would seek to revise its operating strategies accordingly. The Company will continue to assess its liquidity position and potential sources of supplemental liquidity in view of operating performance, current economic and capital market conditions, and other relevant circumstances. 34 Table of Contents As of and for the reporting period ended June 28, 2026, the Company was in compliance with its financial covenants as required under the terms of the credit agreement that established the 2024 Credit Facility (the “2024 Credit Agreement”). The required maximum consolidated secured net leverage ratio and the required minimum consolidated interest coverage ratio, as such ratios are defined in the 2024 Credit Agreement, compared to the actual amounts as of June 28, 2026 and for the fiscal period then ended are as follows: Required Actual Consolidated secured net leverage ratio (12-month period) 2.75 0.61 Consolidated interest coverage ratio (12-month period) 3.00 6.58 In addition, as of June 28, 2026, the Company's consolidated total net leverage ratio (12-month period) was 2.97. While this ratio is not a covenant under the 2024 Credit Agreement, it is used in determining the applicable borrowing margin under the 2024 Credit Agreement. Cash Flows Operating Activities: Cash flows from operating activities are one of the Company's primary sources of liquidity, representing the net income the Company earned in the reported periods, adjusted for certain non-cash items and changes in operating assets and liabilities. Net cash provided by operating activities was $68.9 million for the six months ended June 28, 2026 compared to $189.5 million for the six months ended June 29, 2025. The decrease in operating cash flows is primarily attributable to a $112.8 million use of cash from operating assets and liabilities, net of business acquisitions, compared to a $27.7 million source of cash in the prior year period, partially offset by a $12.2 million increase in net income compared to the six months ended June 29, 2025. Investing Activities: Net cash used in investing activities decreased $42.4 million to $44.2 million for the six months ended June 28, 2026 compared to $86.6 million for the six months ended June 29, 2025 due to a decrease in cash used in business acquisitions, which were $7.3 million for the six months ended June 28, 2026 compared to $48.1 million for the six months ended June 29, 2025. Financing Activities: Net cash used in financing activities decreased $92.5 million to $22.0 million for the six months ended June 28, 2026 compared to $114.4 million for the six months ended June 29, 2025, primarily due to net borrowings under our revolving credit facility of $130.0 million compared to net repayments of $45.0 million for the six months ended June 29, 2025, partially offset by increased stock repurchases of $106.1 million compared to $32.0 million in the prior year period. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS See Note 1, “Basis of Presentation and Significant Accounting Policies” to the accompanying Condensed Consolidated Financial Statements. CRITICAL ACCOUNTING POLICIES There have been no material changes to our critical accounting policies which are summarized in the MD&A in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 19, 2026. OTHER Seasonality Manufacturing operations in the RV, marine, powersports and MH industries historically have been seasonal and at their highest levels when the weather is moderate. Accordingly, the Company’s sales and profits had generally been the highest in the second quarter and lowest in the fourth quarter. Seasonal industry trends in the past several years have included the impact related to the addition of major RV manufacturer open houses for dealers in the August-September 35 Table of Contents timeframe and marine open houses in the December-February timeframe, resulting in dealers delaying certain restocking purchases until new product lines are introduced at these shows. In addition, recent seasonal industry trends have been, and future trends may be, different than in prior years due to volatile economic conditions, interest rates, access to financing, cost of fuel, national and regional economic conditions and consumer confidence on retail sales of RVs, powersports and marine units and other products for which the Company sells its components, as well as fluctuations in RV, powersports and marine dealer inventories, increased volatility in demand from RV, powersports and marine dealers, the timing of dealer orders, and from time to time, the impact of severe weather conditions on the timing of industry-wide wholesale shipments. INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS The Company makes forward-looking statements with respect to financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities for existing products, plans and objectives of management, markets for the common stock of Patrick Industries, Inc., the pending business combination of the Company and LCI Industries, including the expected timing of the consummation of the business combination, and other matters from time to time and desires to take advantage of the “safe harbor” which is afforded such statements under the Private Securities Litigation Reform Act of 1995 when they are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statements. The statements contained in the foregoing “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as other statements contained in this quarterly report and statements contained in future filings with the Securities and Exchange Commission (“SEC”), publicly disseminated press releases, quarterly earnings conference calls, and statements which may be made from time to time in the future by management of the Company in presentations to shareholders, prospective investors, and others interested in the business and financial affairs of the Company, which are not historical facts, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. Any projections of financial performance or statements concerning expectations as to future developments should not be construed in any manner as a guarantee that such results or developments will, in fact, occur. There can be no assurance that any forward-looking statement will be realized or that actual results will not be significantly different from those set forth in such forward-looking statement. The Company does not undertake to publicly update or revise any forward-looking statements. Information about certain risks that could affect our business and cause actual results to differ from those expressed or implied in the forward-looking statements are contained in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and in the Company's Forms 10-Q for subsequent quarterly periods, which are filed with the SEC and are available on the SEC’s website at www.sec.gov.