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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
 
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED September 29, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ……………… to ………………
 
Commission file number 000-03922
 
Patrick_logo-01.jpg
PATRICK INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

Indiana35-1057796
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
                              
107 W. Franklin St.
Elkhart, IN
46516
(Address of principal executive offices) (ZIP Code)
 (574) 294-7511
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
 Common Stock, no par value PATKNASDAQ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.                             
Large accelerated filer ☒Accelerated filer
 ☐
Non-accelerated filer
 ☐
Smaller reporting company ☐Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐ No ☒
As of November 1, 2024, there were 22,399,762 shares of the registrant’s common stock outstanding. 


PATRICK INDUSTRIES, INC.

 TABLE OF CONTENTS 

Page
PART I. FINANCIAL INFORMATION 
  
ITEM 1.
 
 
ITEM 2.
 
ITEM 3.
 
ITEM 4.
 
PART II. OTHER INFORMATION
 
ITEM 1.
ITEM 1A.
 
ITEM 2.
 
ITEM 5.
ITEM 6.
 

2

PART 1: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Third Quarter EndedNine Months Ended
($ in thousands, except per share data)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
NET SALES$919,444 $866,073 $2,869,560 $2,686,858 
Cost of goods sold706,930 666,954 2,220,897 2,083,527 
GROSS PROFIT212,514 199,119 648,663 603,331 
Operating expenses:   
  Warehouse and delivery37,865 37,664 114,053 109,540 
  Selling, general and administrative75,783 70,873 244,617 231,814 
  Amortization of intangible assets24,449 19,507 71,545 59,093 
    Total operating expenses138,097 128,044 430,215 400,447 
OPERATING INCOME74,417 71,075 218,448 202,884 
Interest expense, net20,050 16,879 60,483 53,623 
Income before income taxes54,367 54,196 157,965 149,261 
Income taxes13,501 14,646 34,122 37,181 
NET INCOME$40,866 $39,550 $123,843 $112,080 
BASIC EARNINGS PER COMMON SHARE $1.88 $1.84 $5.71 $5.20 
DILUTED EARNINGS PER COMMON SHARE $1.80 $1.81 $5.55 $5.09 
Weighted average shares outstanding – Basic 21,74021,51121,70621,541
Weighted average shares outstanding – Diluted 22,64121,88422,29722,063
See accompanying Notes to Condensed Consolidated Financial Statements.




3
PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

Third Quarter EndedNine Months Ended
($ in thousands)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
NET INCOME$40,866 $39,550 $123,843 $112,080 
Other comprehensive income (loss), net of tax:
Foreign currency translation gain (loss)43 (10)14 (109)
Total other comprehensive income (loss)43 (10)14 (109)
COMPREHENSIVE INCOME$40,909 $39,540 $123,857 $111,971 
See accompanying Notes to Condensed Consolidated Financial Statements.

4
PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
As of
($ in thousands)September 29, 2024December 31, 2023
ASSETS
Current Assets:
    Cash and cash equivalents$52,606 $11,409 
    Trade and other receivables, net255,369 163,838 
    Inventories545,445 510,133 
    Prepaid expenses and other59,539 49,251 
        Total current assets912,959 734,631 
Property, plant and equipment, net369,342 353,625 
Operating lease right-of-use assets205,110 177,717 
Goodwill789,417 637,393 
Intangible assets, net838,941 651,153 
Other non-current assets7,184 7,929 
        TOTAL ASSETS$3,122,953 $2,562,448 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
    Current maturities of long-term debt$11,250 $7,500 
    Current operating lease liabilities53,335 48,761 
    Accounts payable189,274 140,524 
    Accrued liabilities125,330 111,711 
        Total current liabilities379,189 308,496 
Long-term debt, less current maturities, net1,377,727 1,018,356 
Long-term operating lease liabilities156,083 132,444 
Deferred tax liabilities, net68,012 46,724 
Other long-term liabilities12,461 11,091 
        TOTAL LIABILITIES1,993,472 1,517,111 
SHAREHOLDERS’ EQUITY  
Preferred shares, no par value per share, 1,000,000 shares authorized, none issued and outstanding
— — 
Common stock, no par value per share, 40,000,000 shares authorized, 22,420,560 and 22,160,608 issued and outstanding as of September 29, 2024 and December 31, 2023, respectively
200,530 203,258 
Accumulated other comprehensive loss(985)(999)
Retained earnings929,936 843,078 
        TOTAL SHAREHOLDERS’ EQUITY1,129,481 1,045,337 
        TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$3,122,953 $2,562,448 

See accompanying Notes to Condensed Consolidated Financial Statements.

5
PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended
($ in thousands)September 29, 2024October 1, 2023
CASH FLOWS FROM OPERATING ACTIVITIES  
Net income$123,843 $112,080 
Adjustments to reconcile net income to net cash provided by operating activities: 
Depreciation and amortization 124,002 107,976 
Stock-based compensation expense14,367 13,675 
Other2,335 4,024 
Change in operating assets and liabilities, net of acquisitions of businesses: 
Trade and other receivables, net(67,027)(68,114)
Inventories2,803 154,634 
Prepaid expenses and other assets(3,933)9,098 
Accounts payable, accrued liabilities and other27,800 (39,543)
Net cash provided by operating activities224,190 293,830 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment(50,264)(47,430)
Proceeds from sale of property, plant and equipment2,292 946 
Business acquisitions, net of cash acquired(411,566)(26,009)
Other investing activities (25,863)(2,970)
Net cash used in investing activities(485,401)(75,463)
CASH FLOWS FROM FINANCING ACTIVITIES
Term debt repayments(3,750)(5,625)
Borrowings on revolver1,155,416 482,194 
Repayments on revolver(790,416)(477,482)
Repayments of convertible notes— (172,500)
Stock repurchases under buyback program— (12,230)
Cash dividends paid to shareholders(37,071)(30,260)
Taxes paid for share-based payment arrangements(17,116)(8,762)
Payment of contingent consideration from business acquisitions(4,595)(1,430)
Proceeds from exercise of common stock options21 1,413 
Other financing activities(81)(82)
Net cash provided by (used in) financing activities302,408 (224,764)
Net increase (decrease) in cash and cash equivalents41,197 (6,397)
Cash and cash equivalents at beginning of year11,409 22,847 
Cash and cash equivalents at end of period$52,606 $16,450 

See accompanying Notes to Condensed Consolidated Financial Statements.
6
PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

Third Quarter Ended September 29, 2024
($ in thousands)Common
Stock		Accumulated Other
Comprehensive Loss		Retained
Earnings		Total
Balance at June 30, 2024$198,138 $(1,028)$901,394 $1,098,504 
Net income— — 40,866 40,866 
Dividends declared— — (12,324)(12,324)
Other comprehensive income, net of tax— 43 — 43 
Repurchases of shares for tax payments related to the vesting and exercising of share-based grants(2,233)— — (2,233)
Stock-based compensation expense4,625 — — 4,625 
Balance at September 29, 2024$200,530 $(985)$929,936 $1,129,481 

Third Quarter Ended October 1, 2023
($ in thousands)Common
Stock		Accumulated Other
Comprehensive Loss		Retained
Earnings		Total
Balance at July 2, 2023$196,912 $(794)$801,304 $997,422 
Net income— — 39,550 39,550 
Dividends declared— — (10,021)(10,021)
Other comprehensive loss, net of tax— (10)— (10)
Stock repurchases under buyback program(54)— (406)(460)
Repurchase of shares for tax payments related to the vesting and exercising of share-based grants(1,177)— — (1,177)
Issuance of shares upon exercise of common stock options270 — — 270 
Stock-based compensation expense5,729 — — 5,729 
Balance at October 1, 2023$201,680 $(804)$830,427 $1,031,303 

7
PATRICK INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Continued)

Nine Months Ended September 29, 2024
($ in thousands)Common
Stock		Accumulated Other
Comprehensive Loss		Retained
Earnings		Total
Balance at December 31, 2023$203,258 $(999)$843,078 $1,045,337 
Net income— — 123,843 123,843 
Dividends declared— — (36,985)(36,985)
Other comprehensive loss, net of tax— 14 — 14 
Repurchases of shares for tax payments related to the vesting and exercise of share-based grants(17,116)— — (17,116)
Issuance of shares upon exercise of common stock options21 — — 21 
Stock-based compensation expense14,367 — — 14,367 
Balance at September 29, 2024$200,530 $(985)$929,936 $1,129,481 

Nine Months Ended October 1, 2023
($ in thousands)Common
Stock		Accumulated Other
Comprehensive Loss		Retained
Earnings		Total
Balance at December 31, 2022$197,003 $(695)$758,861 $955,169 
Net income— — 112,080 112,080 
Dividends declared— — (29,927)(29,927)
Other comprehensive loss, net of tax— (109)— (109)
Share repurchases under buyback program(1,649)— (10,587)(12,236)
Repurchases of shares for tax payments related to the vesting and exercise of share-based grants(8,762)— — (8,762)
Issuance of shares upon exercise of common stock options1,413 — — 1,413 
Stock-based compensation expense13,675 — — 13,675 
Balance at October 1, 2023$201,680 $(804)$830,427 $1,031,303 

See accompanying Notes to Condensed Consolidated Financial Statements.
8
PATRICK INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Patrick Industries, Inc. (“Patrick”, the “Company”, "we", "our") contain all adjustments (consisting of normal recurring adjustments) that we believe are necessary to present fairly the Company’s financial position as of September 29, 2024 and December 31, 2023, its results of operations for the third quarter and nine months ended September 29, 2024 and October 1, 2023, respectively, and its cash flows for the nine months ended September 29, 2024 and October 1, 2023.
Patrick's unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The accompanying unaudited condensed consolidated financial statements for Patrick do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Patrick’s Audited Consolidated Financial Statements and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024.
The Company maintains its financial records on the basis of a fiscal year ending on December 31, with the fiscal quarters spanning approximately thirteen weeks. The first quarter ends on the Sunday closest to the end of the first thirteen-week period. The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The third quarter of fiscal year 2024 ended on September 29, 2024, and the third quarter of fiscal year 2023 ended on October 1, 2023.
Reclassified Amounts
Certain amounts have been reclassified in prior year financial statements to conform with current year presentation. These reclassifications are immaterial to the overall financial statements.
Summary of Significant Accounting Policies
A summary of significant accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024.
New Accounting Standards
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification.
The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s unaudited condensed consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures". This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early
9
adoption is also permitted. This ASU will likely result in additional required disclosures when adopted. The Company is currently evaluating this guidance to determine the impact on its disclosures; however, adoption will not otherwise impact our consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures". This ASU establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. The new standard is effective for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating this guidance to determine the impact on its disclosures; however, adoption will not otherwise impact our consolidated financial statements.
NOTE 2. REVENUE RECOGNITION
In the following table, revenue from contracts with customers, net of all intercompany sales, is disaggregated by market type and by reportable segment:
Third Quarter Ended September 29, 2024
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$275,020 $121,476 $396,496 
Marine126,066 9,925 135,991 
Powersports84,487 2,903 87,390 
Manufactured Housing76,634 100,780 177,414 
Industrial113,319 8,834 122,153 
Total$675,526 $243,918 $919,444 
Third Quarter Ended October 1, 2023
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$273,804 $126,300 $400,104 
Marine162,976 8,676 171,652 
Powersports26,015 2,768 28,783 
Manufactured Housing66,671 79,030 145,701 
Industrial111,719 8,114 119,833 
Total$641,185 $224,888 $866,073 
Nine Months Ended September 29, 2024
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$876,170 $391,050 $1,267,220 
Marine417,485 31,499 448,984 
Powersports264,795 9,115 273,910 
Manufactured Housing223,532 284,618 508,150 
Industrial344,799 26,497 371,296 
Total$2,126,781 $742,779 $2,869,560 
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Nine Months Ended October 1, 2023
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$780,993 $369,643 $1,150,636 
Marine604,514 31,451 635,965 
Powersports88,240 9,834 98,074 
Manufactured Housing196,179 226,919 423,098 
Industrial351,753 27,332 379,085 
Total$2,021,679 $665,179 $2,686,858 
Contract Liabilities
Contract liabilities, representing upfront payments from customers received prior to satisfying performance obligations, were immaterial as of the beginning and end of all periods presented and changes in contract liabilities were immaterial during all periods presented.
NOTE 3. INVENTORY
Inventories consisted of the following:
($ in thousands)September 29, 2024December 31, 2023
Raw materials$302,202 $269,786 
Work in process18,647 16,596 
Finished goods106,416 107,675 
Less: reserve for inventory obsolescence(19,016)(15,990)
  Total manufactured goods, net408,249 378,067 
Materials purchased for resale (distribution products)148,574 140,147 
Less: reserve for inventory obsolescence(11,378)(8,081)
  Total materials purchased for resale (distribution products), net137,196 132,066 
Total inventories$545,445 $510,133 
NOTE 4. GOODWILL AND INTANGIBLE ASSETS
Changes in the carrying amount of goodwill for the nine months ended September 29, 2024 by segment are as follows:
($ in thousands)ManufacturingDistributionTotal
Balance at December 31, 2023$560,370 $77,023 $637,393 
Acquisitions119,150 33,051 152,201 
Adjustments to preliminary purchase price allocations60 (237)(177)
Balance at September 29, 2024
$679,580 $109,837 $789,417 
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Intangible assets, net consisted of the following as of September 29, 2024 and December 31, 2023:
($ in thousands)September 29, 2024December 31, 2023
Customer relationships$932,939 $729,664 
Non-compete agreements29,846 21,561 
Patents87,674 69,401 
Trademarks226,527 197,027 
Intangible assets, gross1,276,986 1,017,653 
Less: accumulated amortization(438,045)(366,500)
Intangible assets, net$838,941 $651,153 
Changes in the carrying value of intangible assets for the nine months ended September 29, 2024 by segment are as follows:
($ in thousands)ManufacturingDistributionTotal
Balance at December 31, 2023$553,703 $97,450 $651,153 
Additions197,999 61,690 259,689 
Amortization(61,428)(10,117)(71,545)
Adjustments to preliminary purchase price allocations— (356)(356)
Balance at September 29, 2024
$690,274 $148,667 $838,941 
NOTE 5. ACQUISITIONS
General 
Business combinations generally take place to strengthen Patrick's positions in existing markets and increase its market share and per unit content, expand into additional markets, and gain key technology. Acquisitions are accounted for under the acquisition method of accounting. For each acquisition, the excess of the purchase consideration over the fair value of the net assets acquired is recorded as goodwill, which generally represents the combined value of the Company’s existing purchasing, manufacturing, sales, and systems resources with the organizational talent and expertise of the acquired companies’ respective management teams to maximize efficiencies, market share growth and net income.
The Company completed one acquisition in the third quarter of 2024 and seven acquisitions in the first nine months of 2024 (the "2024 Acquisitions"). For the third quarter and nine months ended September 29, 2024, net sales included in the Company's condensed consolidated statements of income related to the 2024 Acquisitions were $78.6 million and $216.4 million, respectively, and operating income was $12.3 million and $38.9 million, respectively. Acquisition-related costs associated with the 2024 Acquisitions were $5.0 million. Assets acquired and liabilities assumed in the acquisitions were recorded on the Company's condensed consolidated balance sheet at their estimated fair values as of the respective dates of acquisition. For each acquisition, the Company completes its allocation of the purchase price to the fair value of acquired assets and liabilities within a one year measurement period. The Company completed three acquisitions in the first nine months of 2023. For the third quarter and nine months ended October 1, 2023, net sales included in the Company's condensed consolidated statements of income related to the acquisitions completed in the first nine months of 2023 were $7.3 million and $9.8 million, respectively. For the third quarter and nine months ended October 1, 2023, operating losses of $0.1 million and operating income of $0.1 million, respectively, related to the acquisitions completed in the first nine months of 2023 are included in the Company's condensed consolidated statements of income.
In connection with certain acquisitions, the Company is required to pay additional cash consideration if certain financial results of the acquired businesses are achieved. The Company records a liability for the estimated fair value of the contingent consideration related to each of these acquisitions as part of the initial purchase price based on the present value of the expected future cash flows and the probability of future payments at the date of acquisition.
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Changes in the fair value of contingent consideration for the nine months ended September 29, 2024 are as follows:
($ in thousands)
Balance at December 31, 2023$8,510 
Additions3,131 
Fair value adjustments (1)
(1,900)
Settlements(4,976)
Balance at September 29, 2024
$4,765 
(1)The Company recorded a measurement period adjustment reducing the estimated fair value of contingent consideration in connection with one of the 2023 acquisitions.
The following table shows the balance sheet location of the fair value of contingent consideration and the maximum amount of contingent consideration payments the Company may be subject to as of September 29, 2024 and December 31, 2023:
($ in thousands)September 29, 2024December 31, 2023
Accrued liabilities$1,694 $7,500 
Other long-term liabilities3,071 1,010 
Total fair value of contingent consideration$4,765 $8,510 
Maximum amount of contingent consideration$8,665 $8,510 
2024 Acquisitions
The Company completed seven acquisitions in the first nine months ended September 29, 2024, including the following previously announced acquisitions:
CompanySegmentDescription
Sportech, LLC ("Sportech")Manufacturing
Leading designer and manufacturer of high-value, complex component solutions sold to powersports original equipment manufacturers ("OEMs"), adjacent market OEMs and the aftermarket, including integrated door systems, roofs, canopies, bumpers, windshields, fender flares and cowls, based in Elk River, Minnesota, acquired in January 2024.
ICON Direct LLC ("RecPro")DistributionLeading e-commerce business and aftermarket platform specializing in creating and marketing component products, systems, and solutions for the RV and marine end markets, based in Bristol, Indiana, acquired in September 2024
Inclusive of five acquisitions not discussed above, total cash consideration for the 2024 Acquisitions was approximately $411.7 million, plus working capital holdbacks and contingent consideration over a three-year period based on future performance in connection with certain acquisitions. The preliminary purchase price allocations are subject to valuation activities being finalized, and thus certain purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its estimates.
13
2023 Acquisitions
The Company completed three acquisitions in the year ended December 31, 2023, including the following previously announced acquisition (collectively, the “2023 Acquisitions”):
CompanySegmentDescription
BTI TransportDistributionProvider of transportation and logistics services to marine OEMs and dealers, based in Elkhart, Indiana, acquired in April 2023. The acquired business operates under the Patrick Marine Transport brand.
Inclusive of two acquisitions not discussed above, total cash consideration for the 2023 Acquisitions was approximately $26.3 million, plus contingent consideration over a two-year period based on future performance in connection with certain acquisitions. Purchase price allocations and all valuation activities in connection with the 2023 Acquisitions have been finalized. Changes to preliminary purchase accounting estimates recorded in the nine months ended September 29, 2024 related to the 2023 Acquisitions were immaterial and relate primarily to the valuation of contingent consideration and property, plant, and equipment.
The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of acquisition for the 2024 Acquisitions and 2023 Acquisitions:
2024
Acquisitions		2023
Acquisitions
($ in thousands)SportechAll OthersTotalTotal
Consideration:
Cash, net of cash acquired$319,073 $92,586 $411,659 $26,294 
Working capital holdback and other, net— 4,824 4,824 — 
Contingent consideration (1)
— 3,130 3,130 1,600 
Total consideration$319,073 $100,540 $419,613 $27,894 
Assets Acquired:
Trade receivables$21,588 $2,246 $23,834 $1,293 
Inventories21,021 17,095 38,116 4,430 
Prepaid expenses & other1,810 4,316 6,126 105 
Property, plant & equipment18,768 4,043 22,811 8,165 
Operating lease right-of-use assets15,096 1,283 16,379 1,044 
Identifiable intangible assets
Customer relationships151,000 25,780 176,780 10,075 
Non-compete agreements2,000 6,445 8,445 270 
Patents and developed technology17,500 600 18,100 — 
Trademarks21,500 9,000 30,500 — 
Liabilities Assumed:
Current portion of operating lease obligations(1,437)(585)(2,022)(262)
Accounts payable & accrued liabilities(32,145)(3,867)(36,012)(514)
Operating lease obligations(13,658)(699)(14,357)(781)
Deferred tax liabilities(21,288)— (21,288)— 
Total fair value of net assets acquired201,755 65,657 267,412 23,825 
Goodwill (2)
117,318 34,883 152,201 5,814 
Bargain purchase gain (3)
— — — (1,745)
$319,073 $100,540 $419,613 $27,894 
(1)These amounts reflect the acquisition date fair value of contingent consideration based on expected future results relating to certain acquisitions.
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(2)Goodwill is tax-deductible for all acquisitions, except Sportech, which is only partially tax-deductible.
(3)In connection with one of the 2023 Acquisitions, the Company recognized a $1.7 million bargain purchase gain. A bargain purchase gain is recognized when the net assets acquired in a business combination have a higher fair value than the consideration paid. This gain is primarily attributable to the fair value assigned to customer relationships in that acquisition and is included in "Selling, general, and administrative" in the consolidated statement of income for the year ended December 31, 2023
We estimate the value of acquired property, plant, and equipment using a combination of the income, cost, and market approaches, such as estimates of future income growth, capitalization rates, discount rates, and capital expenditure needs of the acquired businesses.
We estimate the value of customer relationships using the multi-period excess earnings method, which is a variation of the income approach, calculating the present value of incremental after-tax cash flows attributable to the asset. Non-compete agreements are valued using a discounted cash flow approach, which is a variation of the income approach, with and without the individual counterparties to the non-compete agreements. Trademarks and patents are valued using the relief-from-royalty method, which applies an estimated royalty rate to forecasted future cash flows, discounted to present value.
The estimated useful life for customer relationships is 10 years. The estimated useful life for non-compete agreements is 5 years. The estimated useful life for patents and developed technology is 10 years. Trademarks have an indefinite useful life.
Pro Forma Information
The following pro forma information for the third quarter and nine months ended September 29, 2024 and October 1, 2023 assumes the 2024 Acquisitions and 2023 Acquisitions occurred as of the beginning of the year immediately preceding each such acquisition. The pro forma information contains the actual operating results of the 2024 Acquisitions and 2023 Acquisitions combined with the results prior to their respective acquisition dates, adjusted to reflect the pro forma impact of the acquisitions occurring as of the beginning of the year immediately preceding each such acquisition.
The pro forma information includes financing and interest expense charges based on incremental borrowings incurred in connection with each transaction. In addition, the pro forma information includes incremental amortization expense, in the aggregate, related to intangible assets acquired in connection with the transactions of $0.4 million and $4.0 million, respectively, for the third quarter and nine months ended September 29, 2024 and $3.0 million and $12.3 million, respectively, for the third quarter and nine months ended October 1, 2023.
 
Third Quarter Ended
Nine Months Ended
($ in thousands, except per share data)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Revenue$933,100 $955,841 $2,949,044 $2,970,700 
Net income$42,115 $41,374 $128,829 $118,141 
Basic earnings per common share$1.94 $1.92 $5.94 $5.48 
Diluted earnings per common share$1.86 $1.89 $5.78 $5.36 
The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisitions been consummated as of the periods indicated above.
15
NOTE 6. STOCK-BASED COMPENSATION
The Company's Board of Directors (the "Board") approved various stock-based grants under the Company’s 2009 Omnibus Incentive Plan in the nine months ended September 29, 2024 totaling 223,011 shares in the aggregate at an average fair value of $100.63 per share at grant date for a total fair value at grant date of $22.4 million.
The Company recorded stock-based compensation expense, net of forfeitures, of approximately $4.7 million and $14.4 million in the third quarter and nine months ended September 29, 2024, respectively, for its stock-based compensation plans in the condensed consolidated statements of income. Stock-based compensation expense, net of forfeitures of $5.8 million and $13.7 million was recorded in the third quarter and nine months ended October 1, 2023, respectively.
NOTE 7. EARNINGS PER COMMON SHARE
Earnings per common share calculated for the third quarter and first nine months of 2024 and 2023 is as follows:
 
Third Quarter Ended
Nine Months Ended
($ in thousands, except per share data)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Numerator:
Earnings for basic earnings per common share calculation$40,866 $39,550 $123,843 $112,080 
Effect of interest on potentially dilutive convertible notes, net of tax— — — 162 
Earnings for diluted earnings per common share calculation$40,866 $39,550 $123,843 $112,242 
Denominator:
Weighted average common shares outstanding - basic21,74021,51121,70621,541
Weighted average impact of potentially dilutive convertible notes554—340221
Weighted average impact of potentially dilutive warrants117 — 39 — 
Weighted average impact of potentially dilutive securities230373212301
Weighted average common shares outstanding - diluted22,64121,88422,29722,063
Earnings per common share:
Basic earnings per common share$1.88 $1.84 $5.71 $5.20 
Diluted earnings per common share$1.80 $1.81 $5.55 $5.09 
An immaterial amount of securities were not included in the computation of diluted earnings per common share as they are considered anti-dilutive for the periods presented.
16
NOTE 8. DEBT
A summary of total debt outstanding at September 29, 2024 and December 31, 2023 is as follows:
($ in thousands)September 29, 2024December 31, 2023
Long-term debt:
Term loan due 2027$125,625 $129,375 
Revolver due 2027365,000 — 
7.50% senior notes due 2027
300,000 300,000 
1.75% convertible notes due 2028
258,750 258,750 
4.75% senior notes due 2029
350,000 350,000 
Total debt1,399,375 1,038,125 
Less: convertible notes deferred financing costs, net(4,169)(4,917)
Less: term loan deferred financing costs, net(434)(548)
Less: senior notes deferred financing costs, net(5,795)(6,804)
Less: current maturities of long-term debt(11,250)(7,500)
Total long-term debt, less current maturities, net$1,377,727 $1,018,356 
As of September 29, 2024, the Company maintained a senior secured credit facility comprised of a $775 million revolving credit facility (the "Revolver due 2027") and a $150 million term loan (the "Term Loan due 2027" and together with the Revolver due 2027, the "2021 Credit Facility"). During the first nine months of 2024, the Company utilized borrowing capacity under the Revolver due 2027 to fund the acquisitions of Sportech and RecPro as discussed in Note 5 "Acquisitions".
The interest rate for incremental borrowings under the Revolver due 2027 as of September 29, 2024 was the Secured Overnight Financing Rate (“SOFR”) plus 1.75% (or 6.71%) for the SOFR-based option. The fee payable on committed but unused portions of the Revolver due 2027 was 0.225% as of September 29, 2024.
Total cash interest paid for the third quarter of 2024 and 2023 was $4.7 million and $8.1 million, respectively, and $44.9 million and $40.8 million for the comparative nine month periods, respectively.
NOTE 9. FAIR VALUE MEASUREMENTS
The following table presents fair values of certain assets and liabilities as of September 29, 2024 and December 31, 2023:
September 29, 2024December 31, 2023
($ in millions)Level 1Level 2Level 3Level 1Level 2Level 3
7.50% senior notes due 2027 (1)
$— $300.5 $— $— $303.7 $— 
4.75% senior notes due 2029 (1)
$— $333.5 $— $— $320.2 $— 
1.75% convertible notes due 2028 (1)
$— $392.6 $— $— $295.2 $— 
Term loan due 2027 (2)
$— $125.6 $— $— $129.4 $— 
Revolver due 2027 (2)
$— $365.0 $— $— $— $— 
Contingent consideration (3)
$— $— $4.8 $— $— $8.5 
(1)The amounts of these notes listed above are the current fair values for disclosure purposes only, and they are recorded in the Company's condensed consolidated balance sheets as of September 29, 2024 and December 31, 2023 using the interest rate method.
(2)The carrying amounts of our Term loan due 2027 and Revolver due 2027 approximate fair value as of September 29, 2024 and December 31, 2023 based upon their terms and conditions in comparison to the terms and conditions of debt instruments with similar terms and conditions available at those dates.
(3)The estimated fair value of the Company's contingent consideration is discussed further in Note 5 "Acquisitions".
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NOTE 10. INCOME TAXES
The effective tax rate in the third quarter of 2024 and 2023 was 24.8% and 27.0%, respectively, and the effective tax rate for the comparable nine month periods was 21.6% and 24.9%, respectively. The first nine months of 2024 and 2023 tax rates include the impact of the recognition of excess tax benefits on share-based compensation that was recorded as a reduction to income tax expense in the amount of $6.7 million and $2.3 million, respectively.
 
Cash paid for income taxes, net of refunds, was $18.2 million and $37.4 million in the third quarter and first nine months of 2024, respectively, and $16.9 million and $65.9 million in the third quarter and first nine months of 2023, respectively.
NOTE 11. SEGMENT INFORMATION
Financial results for the Company's reportable segments have been prepared using a management approach, which is consistent with the basis and manner in which financial information is evaluated by the Company's CODM in allocating resources and in assessing performance. The Company has two reportable segments, Manufacturing and Distribution. The operating results of the operating segments are regularly reviewed by the Company’s CODM, the Chief Executive Officer, to assess the performance of the individual operating segments and to make decisions about resources to be allocated to the operating segments. The Company does not measure profitability at the customer end market (RV, marine, powersports, MH and industrial) level.
The following table presents a reconciliation of segment sales and operating income to consolidated net sales and operating income:
Third Quarter EndedNine Months Ended
($ in thousands)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Segment net sales:
Manufacturing$685,296 $659,493 $2,139,598 $2,072,599 
Distribution239,135 226,859 747,269 671,764 
Eliminations (1)
(4,987)(20,279)(17,307)(57,505)
Consolidated net sales$919,444 $866,073 $2,869,560 $2,686,858 
Operating income for reportable segments:
Manufacturing$86,429 $80,777 $282,631 $263,146 
Distribution23,400 24,026 77,278 68,172 
Unallocated corporate expenses(10,963)(14,221)(69,916)(69,341)
Amortization(24,449)(19,507)(71,545)(59,093)
Consolidated operating income$74,417 $71,075 $218,448 $202,884 
(1)Eliminations in the third quarter and nine months ended September 29, 2024 includes only the elimination of inter-segment transactions.
Unallocated corporate expenses include corporate general and administrative expenses comprised of wages and other compensation, insurance, taxes, supplies, travel and entertainment, professional fees, acquisition-related transaction costs, amortization of inventory step-up adjustments, and other.
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The following table presents an allocation of total assets to the reportable segments of the Company and a reconciliation to consolidated total assets:
($ in thousands)September 29, 2024December 31, 2023
Manufacturing assets$2,467,214 $2,071,500 
Distribution assets540,664 426,931 
Assets for reportable segments3,007,878 2,498,431 
Corporate assets unallocated to segments62,469 52,608 
Cash and cash equivalents52,606 11,409 
Consolidated total assets$3,122,953 $2,562,448 
NOTE 12. STOCK REPURCHASE PROGRAMS
In December 2022, the Board authorized an increase in the amount of the Company's common stock that may be acquired over the next 24 months under the current stock repurchase program to $100 million, which includes $38.2 million remaining under the previous authorization. Approximately $77.6 million remains available for common stock repurchases under the current stock repurchase program as of September 29, 2024. Under the stock repurchase plan, the Company made repurchases of common stock as follows for the respective periods:
 
Third Quarter Ended
Nine Months Ended
($ in millions, except average price data)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Shares repurchased— 6,184 — 185,993
Average price$— $74.43 $— $65.79 
Aggregate cost$— $0.5 $— $12.2 
NOTE 13. COMMITMENTS AND CONTINGENCIES
The Company is subject to proceedings, lawsuits, audits, and other claims arising in the normal course of business. All such matters are subject to uncertainties and outcomes that are not predictable with assurance. Accruals for these items, when applicable, have been provided to the extent that losses are deemed probable and are reasonably estimable. These accruals are adjusted from time to time as developments warrant.
Although the ultimate outcome of these matters cannot be ascertained, on the basis of present information, amounts already provided, availability of insurance coverage and legal advice received, it is the opinion of management that the ultimate resolution of these proceedings, lawsuits, and other claims will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
In the Company's Form 10-K for the year ended December 31, 2023, the Company described the current status of litigation concerning the Lusher Site Remediation Group. In early July 2023, the Court granted the Company’s Rule 54(b) Motion for Final Judgment on previously dismissed claims and granted the Company’s Motion to Dismiss the plaintiff’s remaining claims against the defendants, without prejudice (the Company’s Motion to Dismiss having been joined by the remaining defendants in the litigation.) The only remaining issue pending in the litigation for the Court’s determination is the plaintiff’s motion to bar contribution claims. The Company has also been named as a potentially responsible party for the related Lusher Street Groundwater Contamination Superfund Site (the "Superfund Site") by the U.S. Environmental Protection Agency (the "EPA"). There has been no change in the status of the proceedings as described in the 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024. The Company does not currently believe that the litigation or the Superfund Site matter are likely to have a material adverse impact on its financial condition, results of operations, or cash flows. However, any litigation is inherently uncertain, the EPA has yet to select a final remedy for the Superfund Site, and any judgment or injunctive relief entered against us or any adverse settlement could materially and adversely impact our business, results of operations, financial condition, and prospects.
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NOTE 14. SUBSEQUENT EVENTS
2024 Credit Facility
On October 24, 2024, the Company entered into the Fifth Amended and Restated Credit Agreement dated October 24, 2024 (the “2024 Credit Agreement”), under which the 2021 Credit Facility was increased to $1.0 billion from $925.0 million and the maturity date was extended to October 24, 2029 from August 20, 2027. The credit facility under the 2024 Credit Agreement (the "2024 Credit Facility") is comprised of an $875.0 million revolving credit facility (the "Revolver due 2029") and a $125.0 million term loan (the "Term Loan due 2029").
Under the terms of the 2024 Credit Agreement, the covenant requiring the Company to have a consolidated fixed charge coverage ratio of not more than 1.5 to 1.0 was replaced with a covenant requiring the Company to have an interest coverage ratio (the ratio of Consolidated EBITDA to Consolidated Interest Expense, as defined in the 2024 Credit Agreement) of not less than 3.0 to 1.0 tested on a quarterly basis.

6.375% Senior Notes due 2032
On October 22, 2024, the Company issued $500.0 million in aggregate principal amount of 6.375% senior notes due November 1, 2032 (the “6.375% Senior Notes”) in a transaction pursuant to Rule 144A under the Securities Act. The proceeds from the issuance were utilized to redeem all of the Company's $300.0 million aggregate principal amount of 7.50% Senior Notes due 2027 (the “7.50% Senior Notes”) on November 7, 2024, to repay a portion of the Company’s borrowings under its existing senior secured credit facility and pay fees and expenses in connection with the foregoing. Interest on the 6.375% Senior Notes is payable semi-annually on May 1 and November 1 of each year to holders of record at the close of business on April 15 and October 15 immediately preceding the interest payment date.
7.50% Senior Notes due 2027
On November 7, 2024, the Company redeemed all of its outstanding $300.0 million aggregate principal amount of its 7.50% Senior Notes.
1.75% Convertible Notes due 2028
On September 30, 2024, subsequent to the end of the Company’s fiscal third quarter of 2024, the conversion feature of the 1.75% Convertible Senior Notes due 2028 (the “1.75% Convertible Notes”) was triggered as the last reported price of our common stock was more than or equal to 130% of the conversion price (or $128.66) for at least 20 trading days in the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter ended September 30, 2024. Therefore, the 1.75% Convertible Notes are convertible, in whole or in part, at the option of the holders from October 1, 2024 to December 31, 2024. Whether the 1.75% Convertible Notes will be convertible following such period will depend on the continued satisfaction of this condition or another conversion condition in the future. We had not received any conversion notices from the triggering date of the conversion feature through the issuance date of our unaudited Condensed Consolidated Financial Statements of November 7, 2024. The Company has the intent and ability to utilize available borrowing capacity under the Revolver due 2029 to satisfy any cash conversion obligations that it may have, should holders choose to exercise their conversion rights during the period noted above.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 30 of this Report. The Company undertakes no obligation to update these forward-looking statements.
OVERVIEW OF MARKETS AND RELATED INDUSTRY PERFORMANCE
Third Quarter and Nine Months Ended 2024 Financial Overview
Recreational Vehicle ("RV") Industry 
The RV industry is our primary market and comprised 43% and 44% of the Company's net sales in the third quarter and nine months ended September 29, 2024, respectively, and 46% and 43% in the third quarter and nine months ended October 1, 2023, respectively. Net sales to the RV industry in the third quarter and nine months ended September 29, 2024 decreased 1% and increased 10%, respectively, compared to the prior year periods.
According to the RV Industry Association ("RVIA"), RV wholesale unit shipments in the third quarter of 2024 totaled approximately 77,800 units, an increase of 6% from approximately 73,300 units in the third quarter of 2023. While we estimate RV industry retail unit sales in the third quarter of 2024 decreased by approximately 8% compared to the third quarter of 2023, we estimate that industry retail unit sales exceeded wholesale unit shipments in the third quarter of 2024 as RV OEMs maintained lower production volumes.
RV wholesale unit shipments for the first nine months of 2024 totaled approximately 256,400 units, an increase of 8% from approximately 238,100 units, compared to the first nine months of 2023. While we estimate RV industry retail unit sales in the first nine months of 2024 decreased by approximately 10% compared to the first nine months of 2023, we estimate that industry retail unit sales exceeded wholesale unit shipments which resulted in improved alignment of dealer inventory levels with current retail demand.
Marine Industry
Net sales to the marine industry comprised 15% and 16% of the Company's net sales in the third quarter and nine months ended September 29, 2024, respectively, and 20% and 24% in the third quarter and nine months ended October 1, 2023, respectively. Net sales to the marine industry in the third quarter and nine months ended September 29, 2024 decreased 21% and 29%, respectively, compared to the prior year periods. The decrease in net sales to the marine industry was in line with the decrease in wholesale powerboats volumes.
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 decreased 23% and 27% in the third quarter and first nine months of 2024, respectively, compared to the prior year periods.
We estimate that marine industry retail powerboat unit sales decreased 8% in both the third quarter and first nine months of 2024, respectively, compared to the prior year periods, primarily due to the current macroeconomic environment faced by the end consumer, such as economic uncertainty and higher interest rates.
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Powersports Industry
Through acquisitions completed in recent years, the Company entered the powersports end market. Powersports is a category of motorsports which includes vehicles such as motorcycles, all-terrain vehicles (ATV's), utility vehicles (UTV's), snowmobiles, scooters, golf carts and other personal transportation vehicles, and other related categories. Previously, our sales to the powersports end market were included in the Company’s marine end market sales. Effective with the first quarter of 2024, powersports net sales are being reported separately after the January 2024 acquisition of Sportech, LLC (“Sportech”), as discussed in Note 5 "Acquisitions" of the Notes to Condensed Consolidated Financial Statements.
Net sales to the powersports industry increased 204% in the third quarter ended September 29, 2024 compared to the prior year quarter, representing 10% and 3% of the Company's consolidated net sales in the respective periods. Net sales to the powersports industry increased 179% in the first nine months of 2024 compared to the prior year period, representing 9% and 3% of the Company's consolidated net sales in the respective periods. The increases in net sales for these periods are primarily attributable to the Company's acquisition of Sportech in January 2024.
Manufactured Housing ("MH") Industry
Net sales to the MH industry comprised 19% and 18% of the Company's net sales in the third quarter and nine months ended September 29, 2024, respectively, and 17% and 16% in the third quarter and nine months ended October 1, 2023, respectively. Net sales to the MH industry in the third quarter and the first nine months of September 29, 2024 increased 22% and 20%, 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 increased 17% in both the third quarter and first nine months of 2024 compared to the prior year periods, primarily driven by OEMs increasing production from significantly reduced levels in 2023 in anticipation of a recovery in demand.
Industrial Market
The industrial market is comprised primarily of kitchen cabinet, countertop, hospitality, retail and commercial fixtures, and office and household furniture markets and regional distributors. Net sales to the industrial market comprised 13% of the Company's net sales in both the third quarter and nine months ended September 29, 2024, and 14% in both the third quarter and nine months ended October 1, 2023. Net sales to the industrial market in the third quarter and the first nine months of September 29, 2024 increased 2% and decreased 2%, respectively, compared to the prior year periods. Overall, our revenues in these markets are focused on residential and multifamily housing, hospitality, high-rise housing and office, commercial construction and institutional furniture markets. We estimate that, in general, approximately 70% to 80% of our industrial business is directly tied to the residential housing market, with the remaining 20% to 30% tied to the non-residential and commercial markets.
According to the U.S. Census Bureau, combined new housing starts decreased 3% in the third quarter of 2024 compared to the prior year quarter, reflecting decreases in multifamily housing starts and single-family housing starts of 11% and 1%, respectively.
For the first nine months of 2024, combined new housing starts decreased 3% compared to the prior year period, reflecting a decrease in multifamily housing starts of 29%, partially offset by an increase in single-family housing starts of 10%. 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.
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RESULTS OF OPERATIONS
Third Quarter and Nine Months Ended September 29, 2024 Compared to Third Quarter and Nine Months Ended October 1, 2023 
The following table sets forth the percentage relationship to net sales of certain items on the Company’s Condensed Consolidated Statements of Income.
 Third Quarter Ended Amount Change% Change
($ in thousands)September 29, 2024October 1, 2023
Net sales$919,444 100.0 %$866,073 100.0 %$53,371 6 %
Cost of goods sold706,930 76.9 %666,954 77.0 %39,976 6 %
Gross profit212,514 23.1 %199,119 23.0 %13,395 7 %
Warehouse and delivery expenses37,865 4.1 %37,664 4.3 %201 1 %
Selling, general and administrative expenses75,783 8.2 %70,873 8.2 %4,910 7 %
Amortization of intangible assets24,449 2.7 %19,507 2.3 %4,942 25 %
Operating income74,417 8.1 %71,075 8.2 %3,342 5 %
Interest expense, net20,050 2.2 %16,879 1.9 %3,171 19 %
Income taxes13,501 1.5 %14,646 1.7 %(1,145)(8)%
Net income$40,866 4.4 %$39,550 4.6 %$1,316 3 %
 Nine Months EndedAmount Change% Change
($ in thousands)September 29, 2024October 1, 2023
Net sales$2,869,560 100.0 %$2,686,858 100.0 %$182,702 7 %
Cost of goods sold2,220,897 77.4 %2,083,527 77.5 %137,370 7 %
Gross profit648,663 22.6 %603,331 22.5 %45,332 8 %
Warehouse and delivery expenses114,053 4.0 %109,540 4.1 %4,513 4 %
Selling, general and administrative expenses244,617 8.5 %231,814 8.6 %12,803 6 %
Amortization of intangible assets71,545 2.5 %59,093 2.2 %12,452 21 %
Operating income218,448 7.6 %202,884 7.6 %15,564 8 %
Interest expense, net60,483 2.1 %53,623 2.0 %6,860 13 %
Income taxes34,122 1.2 %37,181 1.4 %(3,059)(8)%
Net income$123,843 4.3 %$112,080 4.2 %$11,763 10 %
Net Sales. Net sales in the third quarter of 2024 increased $53.3 million, or 6%, to $919.4 million compared to $866.1 million in the third quarter of 2023. Net sales in the third quarter of 2024 increased due to increased sales to the powersports, MH and industrial markets, partially offset by decreased sales to the marine and RV markets. Sales to the powersports market increased $58.6 million, or 204%, compared to the prior year quarter, primarily attributable to the Company’s acquisition of Sportech in the first quarter of 2024. Sales to the MH market increased $31.7 million, or 22%, compared to the prior year quarter, primarily due to an increase in estimated wholesale MH industry unit shipments of approximately 17%. Sales to the industrial market increased $2.3 million, or 2%, when compared to the prior year quarter, which is in line with housing start trends in the prior two quarters given the timing at which our products are installed in relation to housing starts. Sales to the marine market decreased $35.7 million, or 21%, primarily attributable to a decrease in estimated wholesale units of 23% compared to the prior year quarter. The Company's sales to the RV market decreased $3.6 million, or 1%, to $396.5 million in the third quarter of 2024 from $400.1 million in the third quarter of 2023, resulting from decreased production by our RV OEM customers.
Net sales in the first nine months of 2024 increased $182.7 million, or 7%, to $2.87 billion from $2.69 billion in the first nine months of 2023. Net sales in the first nine months of 2024 increased due to increased sales to the powersports, RV and MH markets, partially offset by decreased sales to the marine and industrial markets. Sales to the powersports
23
market increased $175.8 million, or 179%, in the first nine months of 2024 compared to the first nine months of 2023, primarily attributable to the Company’s acquisition of Sportech in the first quarter of 2024. Sales to the RV market increased $116.6 million, or 10%, compared to the first nine months of 2023, due to industry volume growth. Sales to the MH market increased $85.1 million, or 20%, compared to the first nine months of 2023, primarily due to an increase in estimated wholesale MH industry unit shipments of approximately 17%. Sales to the marine market decreased $187.0 million, or 29%, compared to the first nine months of 2023, primarily attributable to a decrease in estimated wholesale units of 27% compared to the first nine months of 2023. Sales to the industrial market decreased $7.8 million, or 2%, compared to the first nine months of 2023.
Revenue attributable to acquisitions completed in the first nine months of 2024 was $78.6 million and $216.4 million in the third quarter and the first nine months of 2024, respectively. Revenue attributable to acquisitions completed in the first nine months of 2023 was $7.3 million and $9.8 million in the third quarter and the first nine months of 2023, respectively.
Cost of Goods Sold. Cost of goods sold increased $39.9 million, or 6%, to $706.9 million in the third quarter of 2024 compared to $667.0 million in the third quarter of 2023. As a percentage of net sales, cost of goods sold decreased 10 basis points in the third quarter of 2024 to 76.9% compared to 77.0% in the third quarter of 2023.
Cost of goods sold as a percentage of net sales decreased in the third quarter of 2024 primarily as a result of acquisitions completed in 2023 and 2024 which had a positive impact on material costs, partially offset by increased manufacturing overhead and labor costs, resulting from different cost profiles of acquired businesses. The decrease in cost of goods sold as a percentage of net sales in the third quarter of 2024 primarily reflected a 100 basis point decrease in materials as a percentage of net sales, partially offset by increases of 70 and 20 basis points in overhead and labor, respectively.
Cost of goods sold increased $137.4 million, or 7%, to $2.22 billion in the first nine months of 2024 from $2.08 billion in the first nine months of 2023. As a percentage of net sales, cost of goods sold decreased 10 basis points in the first nine months of 2024 to 77.4% compared to 77.5% in the first nine months of 2023.
Cost of goods sold as a percentage of net sales decreased in the first nine months of 2024 primarily as a result of continued cost reduction and automation initiatives we deployed throughout 2023 and into 2024 that had a positive impact on material and labor costs, partially offset by increased manufacturing overhead costs, resulting from different cost profiles of acquired businesses. The decrease in cost of goods sold as a percentage of net sales in the first nine months of 2024 primarily reflected decreases in materials and labor costs of 40 and 20 basis points, respectively, partially offset by increased overhead cost of 50 basis points. In general, the Company's cost of goods sold percentage can be impacted from quarter-to-quarter by demand changes in certain market sectors that can result in fluctuating costs of certain raw materials and commodity-based components that are utilized in production.
Gross Profit. Gross profit increased $13.4 million, or 7%, to $212.5 million in the third quarter of 2024 compared to $199.1 million in the prior year period. As a percentage of net sales, gross profit increased 10 basis points to 23.1% in the first nine months of 2024 compared to 23.0% in the prior year period.
Gross profit increased $45.4 million, or 8%, to $648.7 million in the first nine months of 2024 compared to $603.3 million in the prior year period. As a percentage of net sales, gross profit increased 10 basis points to 22.6% in the first nine months of 2024 compared to 22.5% in the prior year period. The increase in gross profit as a percentage of net sales in the third quarter and first nine months of 2024 compared to the same periods in 2023 reflects the impact of the factors discussed above under "Cost of Goods Sold".
Warehouse and Delivery Expenses. Warehouse and delivery expenses increased $0.2 million, or 1%, to $37.9 million in the third quarter of 2024 compared to $37.7 million in the third quarter of 2023. As a percentage of net sales, warehouse and delivery expenses decreased 20 basis points to 4.1% in third quarter of 2024 compared to 4.3% the third quarter of 2023.
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Warehouse and delivery expenses increased $4.6 million, or 4%, to $114.1 million in the first nine months of 2024 compared to $109.5 million in the first nine months of 2023. As a percentage of net sales, warehouse and delivery expenses decreased 10 basis points to 4.0% in the first nine months of 2024 compared to 4.1% in the first nine months of 2023.
The increase in warehouse and delivery expenses in the third quarter and first nine months of 2024 compared to the same periods in 2023 is primarily attributable to the increase in sales, and the decrease as a percentage of net sales is primarily attributable to the fixed nature of certain expenses.
Selling, General and Administrative ("SG&A") Expenses. SG&A expenses increased $4.9 million, or 7%, to $75.8 million in the third quarter of 2024 compared to $70.9 million in the prior year quarter. The increase in SG&A expenses in the third quarter of 2024 compared to the prior year quarter is primarily related to increased professional fees and insurance expenses, partially offset by decreased wages and incentive compensation. In the third quarter of 2024, SG&A expenses as a percentage of net sales of 8.2%, remained flat compared to the third quarter of 2023.
SG&A expenses increased $12.8 million, or 6%, to $244.6 million in the first nine months of 2024 compared to $231.8 million in the prior year period. The increase in SG&A expenses in the first nine months of 2024 compared to 2023 is primarily attributable to $5.0 million of transaction costs associated with the acquisition of Sportech, increased technology expenses, wages and incentive compensation, partially offset by decreased insurance expenses.
As a percentage of net sales, SG&A expenses decreased 10 basis points to 8.5% in the first nine months of 2024 compared to 8.6% in the first nine months of 2023. The decrease in SG&A expenses as a percentage of net sales in the first nine months of 2024 compared to the prior year period is primarily attributable to increased net sales and the fixed-cost nature of certain SG&A expenses.
Amortization of Intangible Assets. Amortization of intangible assets increased $4.9 million, or 25%, to $24.4 million in the third quarter of 2024 compared to $19.5 million in the prior year quarter. Amortization of intangible assets increased $12.4 million, or 21%, to $71.5 million in the first nine months of 2024 compared to $59.1 million in the prior year period. The increases in the third quarter and first nine months of 2024 compared to the comparable prior year periods primarily reflect the impact of the Sportech acquisition as well as other acquisitions completed in 2024 and 2023.
Operating Income. Operating income increased $3.3 million, or 5%, to $74.4 million in the third quarter of 2024 compared to $71.1 million in the third quarter of 2023. As a percentage of net sales, operating income decreased 10 basis points to 8.1% in the third quarter of 2024 compared to 8.2% in the same period in 2023. The increase in operating income is primarily attributable to increased net sales and the items discussed above. The decrease to operating income as a percentage of net sales is primarily attributable to the items discussed above.
For the first nine months of 2024, operating income increased $15.5 million, or 8%, to $218.4 million from $202.9 million in the first nine months of 2023. Operating income as a percentage of net sales was 7.6% in both the first nine months of 2024 and the first nine months of 2023. The increase in operating income is primarily attributable to increased net sales and the items discussed above.
Interest Expense, Net. Interest expense increased $3.2 million, or 19%, to $20.1 million in the third quarter of 2024 compared to $16.9 million in the prior year quarter. Interest expense increased $6.9 million, or 13%, to $60.5 million in the first nine months of 2024 from $53.6 million in the prior year period. These increases primarily reflect higher debt levels and higher interest rates on our term loan and revolver balances.
Income Taxes. Income tax expense decreased $1.1 million in the third quarter of 2024 to $13.5 million compared to $14.6 million in the prior year quarter. Income tax expense decreased $3.1 million in the first nine months of 2024 to $34.1 million compared to $37.2 million in the prior year period.
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The effective tax rates were 24.8% and 21.6% in the third quarter and first nine months of 2024, respectively, and 27.0% and 24.9% in the third quarter and first nine months of 2023, respectively. The decrease in income tax expense in the third quarter and first nine months of 2024 compared to the same periods in 2023 is primarily related to increased excess tax benefits on 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 and operating income. The Company does not measure profitability at the customer end market (RV, marine, powersports, MH and industrial) level.
Third Quarter and Nine Months Ended September 29, 2024 Compared to 2023
General
 
In the discussion that follows, sales attributable to the Company’s reportable segments include intersegment sales and gross profit includes the impact of intersegment 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.
 Third Quarter Ended Amount Change% Change
($ in thousands)September 29, 2024October 1, 2023
Sales  
Manufacturing$685,296 $659,493 $25,803 4%
Distribution$239,135 $226,859 $12,276 5%
Gross Profit
Manufacturing$153,793 $144,194 $9,599 7%
Distribution$53,230 $50,187 $3,043 6%
Operating Income
Manufacturing$86,429 $80,777 $5,652 7%
Distribution$23,400 $24,026 $(626)(3)%
 Nine Months EndedAmount Change% Change
($ in thousands)September 29, 2024October 1, 2023
Sales  
Manufacturing$2,139,598 $2,072,599 $66,999 3%
Distribution$747,269 $671,764 $75,505 11%
Gross Profit
Manufacturing$488,711 $460,849 $27,862 6%
Distribution$161,419 $146,787 $14,632 10%
Operating Income
Manufacturing$282,631 $263,146 $19,485 7%
Distribution$77,278 $68,172 $9,106 13%
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Manufacturing
Sales. Manufacturing segment sales increased $25.8 million, or 4%, to $685.3 million in the third quarter of 2024 compared to $659.5 million in the prior year quarter. For the first nine months of 2024, sales increased $67.0 million, or 3%, to $2.14 billion compared to $2.07 billion in the prior year period. The manufacturing segment accounted for approximately 74% of the Company’s sales for both the third quarter of 2024 and 2023, and 74% of the Company's sales for both the first nine months of 2024 and 2023.
Manufacturing segment sales in the third quarter of 2024 compared to the prior year quarter increased due to increased sales to the powersports, MH and industrial markets, partially offset by decreased sales to the marine market. Sales to the powersports market increased 225% compared to the prior year quarter, primarily attributable to the Company’s acquisition of Sportech in the first quarter of 2024. Sales to the MH market increased 15% compared to the prior year quarter, primarily due to an increase in estimated wholesale MH industry unit shipments of approximately 17%. Sales to the industrial market increased 1% when compared to the prior year quarter, which is in line with housing start trends in the prior two quarters given the timing at which our products are installed in relation to housing starts. Sales to the marine market decreased 23%, primarily attributable to a decrease in estimated wholesale units of 23% compared to the prior year quarter.
Manufacturing segment sales in the first nine months of 2024 compared to the same prior year period increased due to increased sales to the powersports, RV and MH markets, partially offset by decreased sales to the marine and industrial markets. Sales to the powersports market increased 200% in the first nine months of 2024, compared to the first nine months of 2023, primarily attributable to the Company’s acquisition of Sportech in the first quarter of 2024. Sales to the RV market increased 12% compared to the first nine months of 2023, due to industry volume growth. Sales to the MH market increased 14% compared to the first nine months of 2023, primarily due to an increase in estimated wholesale MH industry unit shipments of approximately 17%. Sales to the marine market decreased 31% compared to the first nine months of 2023, primarily attributable to a decrease in estimated wholesale unit shipments of 27% compared to the first nine months of 2023. Sales to the industrial market decreased 2% compared to the first nine months of 2023.
Manufacturing segment sales attributable to acquisitions completed in the first nine months of 2024 were $73.9 million and $211.7 million in the third quarter and the first nine months of 2024, respectively.
Gross Profit. Manufacturing segment gross profit increased $9.6 million, or 7%, to $153.8 million in the third quarter of 2024 compared to $144.2 million in the third quarter of 2023. As a percentage of sales, gross profit increased 50 basis points to 22.4% in the third quarter of 2024 compared to 21.9% in the prior year quarter. The increase in gross profit as a percentage of sales in the third quarter of 2024 compared to the same quarter in 2023 is attributable to decreased manufacturing overhead costs, partially offset by increased material and labor costs.
Manufacturing segment gross profit increased $27.9 million, or 6%, to $488.7 million in the first nine months of 2024 compared to $460.8 million in the first nine months of 2023. As a percentage of sales, gross profit increased 60 basis points to 22.8% in the first nine months of 2024 compared to 22.2% in the prior year period. The increase in gross profit as a percentage of sales in the first nine months of 2024 compared to the same period in 2023 is attributable to decreased material and labor costs as a percentage of sales, partially offset by increased manufacturing overhead costs as a percentage of sales.
Operating Income. Operating income increased $5.6 million to $86.4 million in the third quarter of 2024 compared to $80.8 million in the prior year quarter. For the first nine months of 2024, operating income increased $19.5 million, or 7%, to $282.6 million compared to $263.1 million in the first nine months of 2023. The overall increase in operating income in the third quarter and first nine months of 2024 primarily reflects the items discussed above.
Distribution
Sales. Sales increased $12.2 million, or 5%, to $239.1 million in the third quarter of 2024 compared to $226.9 million in the prior year quarter. For the first nine months of 2024, sales increased $75.5 million, or 11%, to $747.3 million compared to $671.8 million in the prior year period. This segment accounted for approximately 26% of the Company’s
27
sales for the third quarter of 2024 and 2023, and 26% and 24% of the Company's sales for the first nine months of 2024 and 2023, respectively.
Distribution segment sales in the third quarter of 2024 compared to the third quarter of 2023 increased due to increased sales to the MH, marine, industrial and powersports markets, partially offset by decreased sales to the RV market. Sales to the MH market increased 28% compared to the prior year quarter, primarily due to an increase in estimated wholesale MH industry unit shipments of approximately 17%. Sales to the marine market increased 14% compared to the prior year quarter, primarily attributable to product mix shifts by certain customers. Sales to the industrial market increased 9% when compared to the prior year quarter, primarily reflecting market share gains and an increase in housing starts in the prior two quarters given the timing at which our products are installed in relation to housing starts. Sales to the powersports market increased 5%, compared to the prior year quarter, primarily attributable to the Company’s acquisition of Sportech in the first quarter of 2024. Sales to the RV market decreased 4% when compared to the prior year quarter primarily due to decreased production by our RV OEM customers.
Distribution segment sales in the first nine months of 2024 compared to the first nine months of 2023 increased due to increased sales to the MH and RV markets, partially offset by decreased sales to the industrial and powersports markets. Sales to the MH market increased 25% compared to the first nine months of 2023, primarily due to an increase in estimated wholesale MH industry unit shipments of approximately 17%. Sales to the RV market increased 6% compared to the first nine months of 2023, due to industry wholesale volume growth. Sales to the industrial market decreased 3% compared to the first nine months of 2023, primarily reflect product mix shifts by certain customers. Sales to the powersports market decreased 7% in the first nine months of 2024 compared to the first nine months of 2023, primarily attributable to product mix shifts by certain customers.
Distribution segment sales attributable to acquisitions completed in the first nine months of 2024 were approximately $4.7 million in both the third quarter and first nine months of 2024.
Gross Profit. Distribution segment gross profit increased $3.0 million, or 6%, to $53.2 million in the third quarter of 2024 compared to $50.2 million in the third quarter of 2023. As a percentage of sales, gross profit increased 20 basis points to 22.3% in the third quarter of 2024 compared to 22.1% in the prior year quarter. The increase in gross profit as a percentage of sales in the third quarter of 2024 compared to the same quarter in 2023 is attributable to decreased material costs as a percentage of sales, partially offset by increased labor costs as a percentage of sales.
Distribution segment gross profit increased $14.6 million, or 10%, to $161.4 million in the first nine months of 2024 compared to $146.8 million in the first nine months of 2023. As a percentage of sales, gross profit decreased 30 basis points to 21.6% in the first nine months of 2024 compared to 21.9% in the prior year period primarily due to different cost profiles of acquired businesses.
Operating Income. Operating income decreased $0.6 million, or 3%, to $23.4 million in the third quarter of 2024 compared to $24.0 million in the prior year quarter. For the first nine months of 2024, operating income increased $9.1 million, or 13%, to $77.3 million compared to $68.2 million in the first nine months of 2023. The changes in operating income in the third quarter and first nine months of 2024 reflect the impact of the items discussed above.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity are cash flows from operation, available cash reserves and borrowing capacity available under the revolving credit and term loan facility (the “2021 Credit Facility”), as discussed in Note 8 "Debt" of the Notes to Condensed Consolidated Financial Statements. Our liquidity as of September 29, 2024 consisted of cash and cash equivalents of $52.6 million and $405.0 million of availability under the 2021 Credit Facility, net of $5 million of outstanding letters of credit.
Subsequent to the end of the third quarter of 2024, we expanded our access to capital and reduced our cost of debt by issuing $500.0 million in aggregate principal amount of 6.375% senior notes due 2032 (the “6.375% Senior Notes”). The proceeds from the issuance were utilized to redeem all $300.0 million aggregate principal amount of the Company’s 7.50% Senior Notes due 2027 (the “7.50% Senior Notes”), to repay a portion of the Company’s borrowings under its existing senior secured credit facility and pay related fees and expenses, as discussed in Note 14 "Subsequent Events" to our Condensed Consolidated Financial Statements.
28
As of September 29, 2024, the Company's existing cash and cash equivalents, cash generated from operations, and available borrowings under the 2021 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.
In the first nine months of 2024, the Company utilized available borrowing capacity under the Revolver due 2027 and cash on hand to fund the acquisitions of Sportech and ICON Direct LLC ("RecPro"), as discussed in Note 5 "Acquisitions" of the Notes to Condensed Consolidated Financial Statements.
As of and for the reporting period ended September 29, 2024, the Company was in compliance with its financial covenants as required under the terms of the credit agreement that established the 2021 Credit Facility (the “2021 Credit Agreement”). The required maximum consolidated secured net leverage ratio and the required minimum consolidated fixed charge coverage ratio, as such ratios are defined in the 2021 Credit Agreement, compared to the actual amounts as of September 29, 2024 and for the fiscal period then ended are as follows:
 RequiredActual
Consolidated secured net leverage ratio (12-month period)2.75 0.85 
Consolidated fixed charge coverage ratio (12-month period)1.50 3.55 
In addition, as of September 29, 2024, the Company's consolidated total net leverage ratio (12-month period) was 2.65, which is used to determine the applicable borrowing margin under the 2021 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 $224.2 million in the first nine months of 2024 compared to $293.8 million in the first nine months of 2023. The decrease in operating cash flows is primarily attributable to a $40.4 million use of cash for working capital, net of business acquisitions, compared to a $56.1 million source of cash in the prior year period, partially offset by a $11.7 million increase in net income and a $16.0 million increase in depreciation and amortization compared to the first nine months of 2023.
Investing Activities: Net cash used in investing activities increased $409.9 million to $485.4 million in the first nine months of 2024 compared to $75.5 million in the first nine months of 2023 due to an increase in cash used in business acquisitions, which were $411.6 million in the nine months of 2024, primarily due to the acquisitions of Sportech and RecPro, compared to $26.0 million in the first nine months of 2023.
Financing Activities: Net cash provided by financing activities was $302.4 million in the first nine months of 2024 compared to $224.8 million use of cash in the first nine months of 2023 primarily due to an increase in cash provided from net borrowings of $365.0 million under the Revolver due 2027 to fund the acquisitions of Sportech and RecPro.

29
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
See Note 1, “Basis of Presentation and Significant Accounting Policies” to the accompanying Condensed Consolidated Financial Statements in Item 1.
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, 2023, filed with the SEC on February 29, 2024.
OTHER
Seasonality
Manufacturing operations in the RV, marine 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 timeframe and marine open houses in the December to 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 and marine units and other products for which the Company sells its components, as well as fluctuations in RV and marine dealer inventories, increased volatility in demand from RV 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. 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, 2023, 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.
30
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Debt Obligations under Credit Agreement
As of September 29, 2024, our total debt obligations under our 2021 Credit Agreement accrue interest under SOFR-based interest rates. A 100-basis point increase in the underlying SOFR would result in additional annual interest cost of approximately $4.9 million, assuming average borrowings, including our revolving credit facility and term loan under our senior credit facility, subject to variable rates of $490.6 million, which was the amount of such borrowings outstanding at September 29, 2024 subject to variable rates, excluding deferred financing costs related to the term loan.
Commodity Volatility
The prices of key raw materials, consisting primarily of lauan, gypsum, particleboard, aluminum, softwoods lumber, and petroleum-based products, are influenced by demand and other factors specific to these commodities, such as the price of oil, rather than being directly affected by inflationary pressures. Prices of certain commodities have historically been volatile. During periods of volatile commodity prices, we have generally been able to pass both price increases and decreases to our customers in the form of price adjustments. We are exposed to risks during periods of commodity volatility because there can be no assurance future cost increases or decreases, if any, can be partially or fully passed on to customers, or that the timing of such sales price increases or decreases will match raw material cost increases or decreases. We do not believe that commodity price volatility had a material effect on results of operations for the periods presented.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company maintains “disclosure controls and procedures”, as such term is defined under Securities Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Securities Exchange Act of 1934, as amended (the “Exchange Act”) reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and the Company’s management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to the Company, including consolidated subsidiaries, required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to the Company’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting
There have been no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the third quarter ended September 29, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
31
PART II: OTHER INFORMATION
Items 3 and 4 of Part II are not applicable and have been omitted.
ITEM 1. LEGAL PROCEEDINGS
We are subject to claims and lawsuits in the ordinary course of business. In management's opinion, currently pending legal proceedings and claims against the Company will not, individually or in the aggregate, have a material adverse effect on its financial condition, results of operations, or cash flows.
See Note 13 "Commitments and Contingencies" to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) Recent Sales of Unregistered Securities. None.
(b) Use of Proceeds. None. 
(c) Issuer Purchases of Equity Securities

The following table summarizes our purchases of common stock in the three months ended September 29, 2024.
Period
Total Number of Shares Purchased (1)
Average Price
Paid Per Share (1)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
July 1 - July 28, 2024— $— — $77,569,000 
July 29 - September 1, 20243,504 $128.90 — $77,569,000 
September 2 - September 29, 202426,297 $146.96 — $77,569,000 
29,801 — 
(1)Amount of 29,801 shares of common stock were purchased by the Company in the period for the purpose of satisfying the minimum tax withholding obligations of employees upon the vesting of stock awards and the exercise of stock options held by the employees.
(2)See Note 12 "Stock Repurchase Programs" of the Notes to Condensed Consolidated Financial Statements for additional information about the Company's stock repurchase program.
ITEM 5. OTHER INFORMATION
During the three months ended September 29, 2024, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement" (as defined in Item 408(c) of Regulation S-K).
32
ITEM 6. EXHIBITS
 101.INSInline XBRL Instance Document
 101.SCHInline XBRL Taxonomy Schema Document
 101.CALInline XBRL Taxonomy Calculation Linkbase Document
 101.DEFInline XBRL Taxonomy Definition Linkbase Document
 101.LABInline XBRL Taxonomy Label Linkbase Document
 101.PREInline XBRL Taxonomy Presentation Linkbase Document

104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

33
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 

 
 
   
Date: November 7, 2024
By:
/s/ Andrew C. Roeder
  Andrew C. Roeder
  Executive Vice President - Finance, Chief Financial Officer, and Treasurer


   
Date: November 7, 2024
By:
/s/ Matthew S. Filer
  Matthew S. Filer
  Senior Vice President - Finance and Chief Accounting Officer
34

Exhibit 31.1
 
CERTIFICATIONS
 
I, Andy L. Nemeth, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Patrick Industries, Inc. (the “registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


 

Date:November 7, 2024/s/ Andy L. Nemeth
 Andy L. Nemeth
Chief Executive Officer



Exhibit 31.2
 
 CERTIFICATIONS          
 
I, Andrew C. Roeder, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Patrick Industries, Inc. (the “registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


 
 
Date: November 7, 2024/s/ Andrew C. Roeder
Andrew C. Roeder
 Executive Vice President - Finance, Chief Financial Officer, and Treasurer



Exhibit 32
 
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the quarterly report of Patrick Industries, Inc. (the “Company”) on Form 10-Q for the quarter ended September 29, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 that: 1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2) the information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.
 
 
 
/s/ Andy L. Nemeth
Andy L. Nemeth
Chief Executive Officer
 
/s/ Andrew C. Roeder
Andrew C. Roeder 
Executive Vice President - Finance, Chief Financial Officer, and Treasurer
 

November 7, 2024


v3.24.3
Cover - shares
 9 Months Ended
Sep. 29, 2024
Nov. 01, 2024
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Entity File Number 000-03922  
Entity Registrant Name PATRICK INDUSTRIES, INC.  
Entity Incorporation, State or Country Code IN  
Entity Tax Identification Number 35-1057796  
Entity Address, Address Line One 107 W. Franklin St.  
Entity Address, City or Town Elkhart  
Entity Address, State or Province IN  
Entity Address, Postal Zip Code 46516  
City Area Code 574  
Local Phone Number 294-7511  
Title of 12(b) Security Common Stock, no par value  
Trading Symbol PATK  
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v3.24.3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Income Statement [Abstract]        
NET SALES $ 919,444 $ 866,073 $ 2,869,560 $ 2,686,858
Cost of goods sold 706,930 666,954 2,220,897 2,083,527
GROSS PROFIT 212,514 199,119 648,663 603,331
Operating expenses:        
Warehouse and delivery 37,865 37,664 114,053 109,540
Selling, general and administrative 75,783 70,873 244,617 231,814
Amortization of intangible assets 24,449 19,507 71,545 59,093
Total operating expenses 138,097 128,044 430,215 400,447
OPERATING INCOME 74,417 71,075 218,448 202,884
Interest expense, net 20,050 16,879 60,483 53,623
Income before income taxes 54,367 54,196 157,965 149,261
Income taxes 13,501 14,646 34,122 37,181
NET INCOME $ 40,866 $ 39,550 $ 123,843 $ 112,080
BASIC EARNINGS PER COMMON SHARE (in dollars per share) $ 1.88 $ 1.84 $ 5.71 $ 5.20
DILUTED EARNINGS PER COMMON SHARE (in dollars per share) $ 1.80 $ 1.81 $ 5.55 $ 5.09
Weighted average shares outstanding - Basic (in shares) 21,740 21,511 21,706 21,541
Weighted average shares outstanding - Diluted (in shares) 22,641 21,884 22,297 22,063
v3.24.3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Statement of Other Comprehensive Income [Abstract]        
NET INCOME $ 40,866 $ 39,550 $ 123,843 $ 112,080
Other comprehensive income (loss), net of tax:        
Foreign currency translation gain (loss) 43 (10) 14 (109)
Total other comprehensive income (loss) 43 (10) 14 (109)
COMPREHENSIVE INCOME $ 40,909 $ 39,540 $ 123,857 $ 111,971
v3.24.3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)
$ in Thousands
Sep. 29, 2024
Dec. 31, 2023
Current Assets:    
Cash and cash equivalents $ 52,606 $ 11,409
Trade and other receivables, net 255,369 163,838
Inventories 545,445 510,133
Prepaid expenses and other 59,539 49,251
Total current assets 912,959 734,631
Property, plant and equipment, net 369,342 353,625
Operating lease right-of-use assets 205,110 177,717
Goodwill 789,417 637,393
Intangible assets, net 838,941 651,153
Other non-current assets 7,184 7,929
TOTAL ASSETS 3,122,953 2,562,448
Current Liabilities:    
Current maturities of long-term debt 11,250 7,500
Current operating lease liabilities 53,335 48,761
Accounts payable 189,274 140,524
Accrued liabilities 125,330 111,711
Total current liabilities 379,189 308,496
Long-term debt, less current maturities, net 1,377,727 1,018,356
Long-term operating lease liabilities 156,083 132,444
Deferred tax liabilities, net 68,012 46,724
Other long-term liabilities 12,461 11,091
TOTAL LIABILITIES 1,993,472 1,517,111
SHAREHOLDERS’ EQUITY    
Preferred shares, no par value per share, 1,000,000 shares authorized, none issued and outstanding 0 0
Common stock, no par value per share, 40,000,000 shares authorized, 22,420,560 and 22,160,608 issued and outstanding as of September 29, 2024 and December 31, 2023, respectively 200,530 203,258
Accumulated other comprehensive loss (985) (999)
Retained earnings 929,936 843,078
TOTAL SHAREHOLDERS’ EQUITY 1,129,481 1,045,337
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 3,122,953 $ 2,562,448
v3.24.3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares
Sep. 29, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Preferred stock, par value (in dollars per share) $ 0 $ 0
Preferred stock, shares authorized (in shares) 1,000,000 1,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 0 $ 0
Common stock, shares authorized (in shares) 40,000,000 40,000,000
Common stock, shares issued (in shares) 22,420,560 22,160,608
Common stock, shares outstanding (in shares) 22,420,560 22,160,608
v3.24.3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Dec. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES          
Net income $ 40,866 $ 39,550 $ 123,843 $ 112,080  
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization     124,002 107,976  
Stock-based compensation expense     14,367 13,675  
Other     2,335 4,024  
Change in operating assets and liabilities, net of acquisitions of businesses:          
Trade and other receivables, net     (67,027) (68,114)  
Inventories     2,803 154,634  
Prepaid expenses and other assets     (3,933) 9,098  
Accounts payable, accrued liabilities and other     27,800 (39,543)  
Net cash provided by operating activities     224,190 293,830  
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchases of property, plant and equipment     (50,264) (47,430)  
Proceeds from sale of property, plant and equipment     2,292 946  
Business acquisitions, net of cash acquired     (411,566) (26,009)  
Other investing activities     (25,863) (2,970)  
Net cash used in investing activities     (485,401) (75,463)  
CASH FLOWS FROM FINANCING ACTIVITIES          
Term debt repayments     (3,750) (5,625)  
Borrowings on revolver     1,155,416 482,194  
Repayments on revolver     (790,416) (477,482)  
Repayments of convertible notes     0 (172,500)  
Stock repurchases under buyback program     0 (12,230)  
Cash dividends paid to shareholders     (37,071) (30,260)  
Taxes paid for share-based payment arrangements     (17,116) (8,762)  
Payment of contingent consideration from business acquisitions     (4,595) (1,430)  
Proceeds from exercise of common stock options     21 1,413  
Other financing activities     (81) (82)  
Net cash provided by (used in) financing activities     302,408 (224,764)  
Net increase (decrease) in cash and cash equivalents     41,197 (6,397)  
Cash and cash equivalents at beginning of year     11,409 22,847 $ 22,847
Cash and cash equivalents at end of period $ 52,606 $ 16,450 $ 52,606 $ 16,450 $ 11,409
v3.24.3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($)
$ in Thousands
Total
Common Stock
Accumulated Other Comprehensive Loss
Retained Earnings
Beginning balance at Dec. 31, 2022 $ 955,169 $ 197,003 $ (695) $ 758,861
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net income 112,080     112,080
Dividends declared (29,927)     (29,927)
Other comprehensive income, net of tax (109)   (109)  
Stock repurchases under buyback program (12,236) (1,649)   (10,587)
Repurchases of shares for tax payments related to the vesting and exercising of share-based grants (8,762) (8,762)    
Issuance of shares upon exercise of common stock options 1,413 1,413    
Stock-based compensation expense 13,675 13,675    
Ending balance at Oct. 01, 2023 1,031,303 201,680 (804) 830,427
Beginning balance at Jul. 02, 2023 997,422 196,912 (794) 801,304
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net income 39,550     39,550
Dividends declared (10,021)     (10,021)
Other comprehensive income, net of tax (10)   (10)  
Stock repurchases under buyback program (460) (54)   (406)
Repurchases of shares for tax payments related to the vesting and exercising of share-based grants (1,177) (1,177)    
Issuance of shares upon exercise of common stock options 270 270    
Stock-based compensation expense 5,729 5,729    
Ending balance at Oct. 01, 2023 1,031,303 201,680 (804) 830,427
Beginning balance at Dec. 31, 2023 1,045,337 203,258 (999) 843,078
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net income 123,843     123,843
Dividends declared (36,985)     (36,985)
Other comprehensive income, net of tax 14   14  
Repurchases of shares for tax payments related to the vesting and exercising of share-based grants (17,116) (17,116)    
Issuance of shares upon exercise of common stock options 21 21    
Stock-based compensation expense 14,367 14,367    
Ending balance at Sep. 29, 2024 1,129,481 200,530 (985) 929,936
Beginning balance at Jun. 30, 2024 1,098,504 198,138 (1,028) 901,394
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net income 40,866     40,866
Dividends declared (12,324)     (12,324)
Other comprehensive income, net of tax 43   43  
Repurchases of shares for tax payments related to the vesting and exercising of share-based grants (2,233) (2,233)    
Stock-based compensation expense 4,625 4,625    
Ending balance at Sep. 29, 2024 $ 1,129,481 $ 200,530 $ (985) $ 929,936
v3.24.3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
 9 Months Ended
Sep. 29, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Patrick Industries, Inc. (“Patrick”, the “Company”, "we", "our") contain all adjustments (consisting of normal recurring adjustments) that we believe are necessary to present fairly the Company’s financial position as of September 29, 2024 and December 31, 2023, its results of operations for the third quarter and nine months ended September 29, 2024 and October 1, 2023, respectively, and its cash flows for the nine months ended September 29, 2024 and October 1, 2023.
Patrick's unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The accompanying unaudited condensed consolidated financial statements for Patrick do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Patrick’s Audited Consolidated Financial Statements and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024.
The Company maintains its financial records on the basis of a fiscal year ending on December 31, with the fiscal quarters spanning approximately thirteen weeks. The first quarter ends on the Sunday closest to the end of the first thirteen-week period. The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The third quarter of fiscal year 2024 ended on September 29, 2024, and the third quarter of fiscal year 2023 ended on October 1, 2023.
Reclassified Amounts
Certain amounts have been reclassified in prior year financial statements to conform with current year presentation. These reclassifications are immaterial to the overall financial statements.
Summary of Significant Accounting Policies
A summary of significant accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024.
New Accounting Standards
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification.
The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s unaudited condensed consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures". This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early
adoption is also permitted. This ASU will likely result in additional required disclosures when adopted. The Company is currently evaluating this guidance to determine the impact on its disclosures; however, adoption will not otherwise impact our consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures". This ASU establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. The new standard is effective for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating this guidance to determine the impact on its disclosures; however, adoption will not otherwise impact our consolidated financial statements.
v3.24.3
REVENUE RECOGNITION
 9 Months Ended
Sep. 29, 2024
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION REVENUE RECOGNITION
In the following table, revenue from contracts with customers, net of all intercompany sales, is disaggregated by market type and by reportable segment:
Third Quarter Ended September 29, 2024
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$275,020 $121,476 $396,496 
Marine126,066 9,925 135,991 
Powersports84,487 2,903 87,390 
Manufactured Housing76,634 100,780 177,414 
Industrial113,319 8,834 122,153 
Total$675,526 $243,918 $919,444 
Third Quarter Ended October 1, 2023
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$273,804 $126,300 $400,104 
Marine162,976 8,676 171,652 
Powersports26,015 2,768 28,783 
Manufactured Housing66,671 79,030 145,701 
Industrial111,719 8,114 119,833 
Total$641,185 $224,888 $866,073 
Nine Months Ended September 29, 2024
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$876,170 $391,050 $1,267,220 
Marine417,485 31,499 448,984 
Powersports264,795 9,115 273,910 
Manufactured Housing223,532 284,618 508,150 
Industrial344,799 26,497 371,296 
Total$2,126,781 $742,779 $2,869,560 
Nine Months Ended October 1, 2023
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$780,993 $369,643 $1,150,636 
Marine604,514 31,451 635,965 
Powersports88,240 9,834 98,074 
Manufactured Housing196,179 226,919 423,098 
Industrial351,753 27,332 379,085 
Total$2,021,679 $665,179 $2,686,858 
Contract Liabilities
Contract liabilities, representing upfront payments from customers received prior to satisfying performance obligations, were immaterial as of the beginning and end of all periods presented and changes in contract liabilities were immaterial during all periods presented.
v3.24.3
INVENTORY
 9 Months Ended
Sep. 29, 2024
Inventory Disclosure [Abstract]  
INVENTORY INVENTORY
Inventories consisted of the following:
($ in thousands)September 29, 2024December 31, 2023
Raw materials$302,202 $269,786 
Work in process18,647 16,596 
Finished goods106,416 107,675 
Less: reserve for inventory obsolescence(19,016)(15,990)
  Total manufactured goods, net408,249 378,067 
Materials purchased for resale (distribution products)148,574 140,147 
Less: reserve for inventory obsolescence(11,378)(8,081)
  Total materials purchased for resale (distribution products), net137,196 132,066 
Total inventories$545,445 $510,133 
v3.24.3
GOODWILL AND INTANGIBLE ASSETS
 9 Months Ended
Sep. 29, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLE ASSETS GOODWILL AND INTANGIBLE ASSETS
Changes in the carrying amount of goodwill for the nine months ended September 29, 2024 by segment are as follows:
($ in thousands)ManufacturingDistributionTotal
Balance at December 31, 2023$560,370 $77,023 $637,393 
Acquisitions119,150 33,051 152,201 
Adjustments to preliminary purchase price allocations60 (237)(177)
Balance at September 29, 2024
$679,580 $109,837 $789,417 
Intangible assets, net consisted of the following as of September 29, 2024 and December 31, 2023:
($ in thousands)September 29, 2024December 31, 2023
Customer relationships$932,939 $729,664 
Non-compete agreements29,846 21,561 
Patents87,674 69,401 
Trademarks226,527 197,027 
Intangible assets, gross1,276,986 1,017,653 
Less: accumulated amortization(438,045)(366,500)
Intangible assets, net$838,941 $651,153 
Changes in the carrying value of intangible assets for the nine months ended September 29, 2024 by segment are as follows:
($ in thousands)ManufacturingDistributionTotal
Balance at December 31, 2023$553,703 $97,450 $651,153 
Additions197,999 61,690 259,689 
Amortization(61,428)(10,117)(71,545)
Adjustments to preliminary purchase price allocations— (356)(356)
Balance at September 29, 2024
$690,274 $148,667 $838,941 
v3.24.3
ACQUISITIONS
 9 Months Ended
Sep. 29, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
ACQUISITIONS ACQUISITIONS
General 
Business combinations generally take place to strengthen Patrick's positions in existing markets and increase its market share and per unit content, expand into additional markets, and gain key technology. Acquisitions are accounted for under the acquisition method of accounting. For each acquisition, the excess of the purchase consideration over the fair value of the net assets acquired is recorded as goodwill, which generally represents the combined value of the Company’s existing purchasing, manufacturing, sales, and systems resources with the organizational talent and expertise of the acquired companies’ respective management teams to maximize efficiencies, market share growth and net income.
The Company completed one acquisition in the third quarter of 2024 and seven acquisitions in the first nine months of 2024 (the "2024 Acquisitions"). For the third quarter and nine months ended September 29, 2024, net sales included in the Company's condensed consolidated statements of income related to the 2024 Acquisitions were $78.6 million and $216.4 million, respectively, and operating income was $12.3 million and $38.9 million, respectively. Acquisition-related costs associated with the 2024 Acquisitions were $5.0 million. Assets acquired and liabilities assumed in the acquisitions were recorded on the Company's condensed consolidated balance sheet at their estimated fair values as of the respective dates of acquisition. For each acquisition, the Company completes its allocation of the purchase price to the fair value of acquired assets and liabilities within a one year measurement period. The Company completed three acquisitions in the first nine months of 2023. For the third quarter and nine months ended October 1, 2023, net sales included in the Company's condensed consolidated statements of income related to the acquisitions completed in the first nine months of 2023 were $7.3 million and $9.8 million, respectively. For the third quarter and nine months ended October 1, 2023, operating losses of $0.1 million and operating income of $0.1 million, respectively, related to the acquisitions completed in the first nine months of 2023 are included in the Company's condensed consolidated statements of income.
In connection with certain acquisitions, the Company is required to pay additional cash consideration if certain financial results of the acquired businesses are achieved. The Company records a liability for the estimated fair value of the contingent consideration related to each of these acquisitions as part of the initial purchase price based on the present value of the expected future cash flows and the probability of future payments at the date of acquisition.
Changes in the fair value of contingent consideration for the nine months ended September 29, 2024 are as follows:
($ in thousands)
Balance at December 31, 2023$8,510 
Additions3,131 
Fair value adjustments (1)
(1,900)
Settlements(4,976)
Balance at September 29, 2024
$4,765 
(1)The Company recorded a measurement period adjustment reducing the estimated fair value of contingent consideration in connection with one of the 2023 acquisitions.
The following table shows the balance sheet location of the fair value of contingent consideration and the maximum amount of contingent consideration payments the Company may be subject to as of September 29, 2024 and December 31, 2023:
($ in thousands)September 29, 2024December 31, 2023
Accrued liabilities$1,694 $7,500 
Other long-term liabilities3,071 1,010 
Total fair value of contingent consideration$4,765 $8,510 
Maximum amount of contingent consideration$8,665 $8,510 
2024 Acquisitions
The Company completed seven acquisitions in the first nine months ended September 29, 2024, including the following previously announced acquisitions:
CompanySegmentDescription
Sportech, LLC ("Sportech")Manufacturing
Leading designer and manufacturer of high-value, complex component solutions sold to powersports original equipment manufacturers ("OEMs"), adjacent market OEMs and the aftermarket, including integrated door systems, roofs, canopies, bumpers, windshields, fender flares and cowls, based in Elk River, Minnesota, acquired in January 2024.
ICON Direct LLC ("RecPro")DistributionLeading e-commerce business and aftermarket platform specializing in creating and marketing component products, systems, and solutions for the RV and marine end markets, based in Bristol, Indiana, acquired in September 2024
Inclusive of five acquisitions not discussed above, total cash consideration for the 2024 Acquisitions was approximately $411.7 million, plus working capital holdbacks and contingent consideration over a three-year period based on future performance in connection with certain acquisitions. The preliminary purchase price allocations are subject to valuation activities being finalized, and thus certain purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its estimates.
2023 Acquisitions
The Company completed three acquisitions in the year ended December 31, 2023, including the following previously announced acquisition (collectively, the “2023 Acquisitions”):
CompanySegmentDescription
BTI TransportDistributionProvider of transportation and logistics services to marine OEMs and dealers, based in Elkhart, Indiana, acquired in April 2023. The acquired business operates under the Patrick Marine Transport brand.
Inclusive of two acquisitions not discussed above, total cash consideration for the 2023 Acquisitions was approximately $26.3 million, plus contingent consideration over a two-year period based on future performance in connection with certain acquisitions. Purchase price allocations and all valuation activities in connection with the 2023 Acquisitions have been finalized. Changes to preliminary purchase accounting estimates recorded in the nine months ended September 29, 2024 related to the 2023 Acquisitions were immaterial and relate primarily to the valuation of contingent consideration and property, plant, and equipment.
The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of acquisition for the 2024 Acquisitions and 2023 Acquisitions:
2024
Acquisitions		2023
Acquisitions
($ in thousands)SportechAll OthersTotalTotal
Consideration:
Cash, net of cash acquired$319,073 $92,586 $411,659 $26,294 
Working capital holdback and other, net— 4,824 4,824 — 
Contingent consideration (1)
— 3,130 3,130 1,600 
Total consideration$319,073 $100,540 $419,613 $27,894 
Assets Acquired:
Trade receivables$21,588 $2,246 $23,834 $1,293 
Inventories21,021 17,095 38,116 4,430 
Prepaid expenses & other1,810 4,316 6,126 105 
Property, plant & equipment18,768 4,043 22,811 8,165 
Operating lease right-of-use assets15,096 1,283 16,379 1,044 
Identifiable intangible assets
Customer relationships151,000 25,780 176,780 10,075 
Non-compete agreements2,000 6,445 8,445 270 
Patents and developed technology17,500 600 18,100 — 
Trademarks21,500 9,000 30,500 — 
Liabilities Assumed:
Current portion of operating lease obligations(1,437)(585)(2,022)(262)
Accounts payable & accrued liabilities(32,145)(3,867)(36,012)(514)
Operating lease obligations(13,658)(699)(14,357)(781)
Deferred tax liabilities(21,288)— (21,288)— 
Total fair value of net assets acquired201,755 65,657 267,412 23,825 
Goodwill (2)
117,318 34,883 152,201 5,814 
Bargain purchase gain (3)
— — — (1,745)
$319,073 $100,540 $419,613 $27,894 
(1)These amounts reflect the acquisition date fair value of contingent consideration based on expected future results relating to certain acquisitions.
(2)Goodwill is tax-deductible for all acquisitions, except Sportech, which is only partially tax-deductible.
(3)In connection with one of the 2023 Acquisitions, the Company recognized a $1.7 million bargain purchase gain. A bargain purchase gain is recognized when the net assets acquired in a business combination have a higher fair value than the consideration paid. This gain is primarily attributable to the fair value assigned to customer relationships in that acquisition and is included in "Selling, general, and administrative" in the consolidated statement of income for the year ended December 31, 2023
We estimate the value of acquired property, plant, and equipment using a combination of the income, cost, and market approaches, such as estimates of future income growth, capitalization rates, discount rates, and capital expenditure needs of the acquired businesses.
We estimate the value of customer relationships using the multi-period excess earnings method, which is a variation of the income approach, calculating the present value of incremental after-tax cash flows attributable to the asset. Non-compete agreements are valued using a discounted cash flow approach, which is a variation of the income approach, with and without the individual counterparties to the non-compete agreements. Trademarks and patents are valued using the relief-from-royalty method, which applies an estimated royalty rate to forecasted future cash flows, discounted to present value.
The estimated useful life for customer relationships is 10 years. The estimated useful life for non-compete agreements is 5 years. The estimated useful life for patents and developed technology is 10 years. Trademarks have an indefinite useful life.
Pro Forma Information
The following pro forma information for the third quarter and nine months ended September 29, 2024 and October 1, 2023 assumes the 2024 Acquisitions and 2023 Acquisitions occurred as of the beginning of the year immediately preceding each such acquisition. The pro forma information contains the actual operating results of the 2024 Acquisitions and 2023 Acquisitions combined with the results prior to their respective acquisition dates, adjusted to reflect the pro forma impact of the acquisitions occurring as of the beginning of the year immediately preceding each such acquisition.
The pro forma information includes financing and interest expense charges based on incremental borrowings incurred in connection with each transaction. In addition, the pro forma information includes incremental amortization expense, in the aggregate, related to intangible assets acquired in connection with the transactions of $0.4 million and $4.0 million, respectively, for the third quarter and nine months ended September 29, 2024 and $3.0 million and $12.3 million, respectively, for the third quarter and nine months ended October 1, 2023.
 
Third Quarter Ended
Nine Months Ended
($ in thousands, except per share data)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Revenue$933,100 $955,841 $2,949,044 $2,970,700 
Net income$42,115 $41,374 $128,829 $118,141 
Basic earnings per common share$1.94 $1.92 $5.94 $5.48 
Diluted earnings per common share$1.86 $1.89 $5.78 $5.36 
The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisitions been consummated as of the periods indicated above.
v3.24.3
STOCK-BASED COMPENSATION
 9 Months Ended
Sep. 29, 2024
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
The Company's Board of Directors (the "Board") approved various stock-based grants under the Company’s 2009 Omnibus Incentive Plan in the nine months ended September 29, 2024 totaling 223,011 shares in the aggregate at an average fair value of $100.63 per share at grant date for a total fair value at grant date of $22.4 million.
The Company recorded stock-based compensation expense, net of forfeitures, of approximately $4.7 million and $14.4 million in the third quarter and nine months ended September 29, 2024, respectively, for its stock-based compensation plans in the condensed consolidated statements of income. Stock-based compensation expense, net of forfeitures of $5.8 million and $13.7 million was recorded in the third quarter and nine months ended October 1, 2023, respectively.
v3.24.3
EARNINGS PER COMMON SHARE
 9 Months Ended
Sep. 29, 2024
Earnings Per Share [Abstract]  
EARNINGS PER COMMON SHARE EARNINGS PER COMMON SHARE
Earnings per common share calculated for the third quarter and first nine months of 2024 and 2023 is as follows:
 
Third Quarter Ended
Nine Months Ended
($ in thousands, except per share data)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Numerator:
Earnings for basic earnings per common share calculation$40,866 $39,550 $123,843 $112,080 
Effect of interest on potentially dilutive convertible notes, net of tax— — — 162 
Earnings for diluted earnings per common share calculation$40,866 $39,550 $123,843 $112,242 
Denominator:
Weighted average common shares outstanding - basic21,74021,51121,70621,541
Weighted average impact of potentially dilutive convertible notes554—340221
Weighted average impact of potentially dilutive warrants117 — 39 — 
Weighted average impact of potentially dilutive securities230373212301
Weighted average common shares outstanding - diluted22,64121,88422,29722,063
Earnings per common share:
Basic earnings per common share$1.88 $1.84 $5.71 $5.20 
Diluted earnings per common share$1.80 $1.81 $5.55 $5.09 
An immaterial amount of securities were not included in the computation of diluted earnings per common share as they are considered anti-dilutive for the periods presented.
v3.24.3
DEBT
 9 Months Ended
Sep. 29, 2024
Debt Disclosure [Abstract]  
DEBT DEBT
A summary of total debt outstanding at September 29, 2024 and December 31, 2023 is as follows:
($ in thousands)September 29, 2024December 31, 2023
Long-term debt:
Term loan due 2027$125,625 $129,375 
Revolver due 2027365,000 — 
7.50% senior notes due 2027
300,000 300,000 
1.75% convertible notes due 2028
258,750 258,750 
4.75% senior notes due 2029
350,000 350,000 
Total debt1,399,375 1,038,125 
Less: convertible notes deferred financing costs, net(4,169)(4,917)
Less: term loan deferred financing costs, net(434)(548)
Less: senior notes deferred financing costs, net(5,795)(6,804)
Less: current maturities of long-term debt(11,250)(7,500)
Total long-term debt, less current maturities, net$1,377,727 $1,018,356 
As of September 29, 2024, the Company maintained a senior secured credit facility comprised of a $775 million revolving credit facility (the "Revolver due 2027") and a $150 million term loan (the "Term Loan due 2027" and together with the Revolver due 2027, the "2021 Credit Facility"). During the first nine months of 2024, the Company utilized borrowing capacity under the Revolver due 2027 to fund the acquisitions of Sportech and RecPro as discussed in Note 5 "Acquisitions".
The interest rate for incremental borrowings under the Revolver due 2027 as of September 29, 2024 was the Secured Overnight Financing Rate (“SOFR”) plus 1.75% (or 6.71%) for the SOFR-based option. The fee payable on committed but unused portions of the Revolver due 2027 was 0.225% as of September 29, 2024.
Total cash interest paid for the third quarter of 2024 and 2023 was $4.7 million and $8.1 million, respectively, and $44.9 million and $40.8 million for the comparative nine month periods, respectively.
v3.24.3
FAIR VALUE MEASUREMENTS
 9 Months Ended
Sep. 29, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The following table presents fair values of certain assets and liabilities as of September 29, 2024 and December 31, 2023:
September 29, 2024December 31, 2023
($ in millions)Level 1Level 2Level 3Level 1Level 2Level 3
7.50% senior notes due 2027 (1)
$— $300.5 $— $— $303.7 $— 
4.75% senior notes due 2029 (1)
$— $333.5 $— $— $320.2 $— 
1.75% convertible notes due 2028 (1)
$— $392.6 $— $— $295.2 $— 
Term loan due 2027 (2)
$— $125.6 $— $— $129.4 $— 
Revolver due 2027 (2)
$— $365.0 $— $— $— $— 
Contingent consideration (3)
$— $— $4.8 $— $— $8.5 
(1)The amounts of these notes listed above are the current fair values for disclosure purposes only, and they are recorded in the Company's condensed consolidated balance sheets as of September 29, 2024 and December 31, 2023 using the interest rate method.
(2)The carrying amounts of our Term loan due 2027 and Revolver due 2027 approximate fair value as of September 29, 2024 and December 31, 2023 based upon their terms and conditions in comparison to the terms and conditions of debt instruments with similar terms and conditions available at those dates.
(3)The estimated fair value of the Company's contingent consideration is discussed further in Note 5 "Acquisitions".
v3.24.3
INCOME TAXES
 9 Months Ended
Sep. 29, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The effective tax rate in the third quarter of 2024 and 2023 was 24.8% and 27.0%, respectively, and the effective tax rate for the comparable nine month periods was 21.6% and 24.9%, respectively. The first nine months of 2024 and 2023 tax rates include the impact of the recognition of excess tax benefits on share-based compensation that was recorded as a reduction to income tax expense in the amount of $6.7 million and $2.3 million, respectively.
 
Cash paid for income taxes, net of refunds, was $18.2 million and $37.4 million in the third quarter and first nine months of 2024, respectively, and $16.9 million and $65.9 million in the third quarter and first nine months of 2023, respectively.
v3.24.3
SEGMENT INFORMATION
 9 Months Ended
Sep. 29, 2024
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
Financial results for the Company's reportable segments have been prepared using a management approach, which is consistent with the basis and manner in which financial information is evaluated by the Company's CODM in allocating resources and in assessing performance. The Company has two reportable segments, Manufacturing and Distribution. The operating results of the operating segments are regularly reviewed by the Company’s CODM, the Chief Executive Officer, to assess the performance of the individual operating segments and to make decisions about resources to be allocated to the operating segments. The Company does not measure profitability at the customer end market (RV, marine, powersports, MH and industrial) level.
The following table presents a reconciliation of segment sales and operating income to consolidated net sales and operating income:
Third Quarter EndedNine Months Ended
($ in thousands)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Segment net sales:
Manufacturing$685,296 $659,493 $2,139,598 $2,072,599 
Distribution239,135 226,859 747,269 671,764 
Eliminations (1)
(4,987)(20,279)(17,307)(57,505)
Consolidated net sales$919,444 $866,073 $2,869,560 $2,686,858 
Operating income for reportable segments:
Manufacturing$86,429 $80,777 $282,631 $263,146 
Distribution23,400 24,026 77,278 68,172 
Unallocated corporate expenses(10,963)(14,221)(69,916)(69,341)
Amortization(24,449)(19,507)(71,545)(59,093)
Consolidated operating income$74,417 $71,075 $218,448 $202,884 
(1)Eliminations in the third quarter and nine months ended September 29, 2024 includes only the elimination of inter-segment transactions.
Unallocated corporate expenses include corporate general and administrative expenses comprised of wages and other compensation, insurance, taxes, supplies, travel and entertainment, professional fees, acquisition-related transaction costs, amortization of inventory step-up adjustments, and other.
The following table presents an allocation of total assets to the reportable segments of the Company and a reconciliation to consolidated total assets:
($ in thousands)September 29, 2024December 31, 2023
Manufacturing assets$2,467,214 $2,071,500 
Distribution assets540,664 426,931 
Assets for reportable segments3,007,878 2,498,431 
Corporate assets unallocated to segments62,469 52,608 
Cash and cash equivalents52,606 11,409 
Consolidated total assets$3,122,953 $2,562,448 
v3.24.3
STOCK REPURCHASE PROGRAMS
 9 Months Ended
Sep. 29, 2024
Equity [Abstract]  
STOCK REPURCHASE PROGRAMS STOCK REPURCHASE PROGRAMS
In December 2022, the Board authorized an increase in the amount of the Company's common stock that may be acquired over the next 24 months under the current stock repurchase program to $100 million, which includes $38.2 million remaining under the previous authorization. Approximately $77.6 million remains available for common stock repurchases under the current stock repurchase program as of September 29, 2024. Under the stock repurchase plan, the Company made repurchases of common stock as follows for the respective periods:
 
Third Quarter Ended
Nine Months Ended
($ in millions, except average price data)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Shares repurchased— 6,184 — 185,993
Average price$— $74.43 $— $65.79 
Aggregate cost$— $0.5 $— $12.2 
v3.24.3
COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 29, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
The Company is subject to proceedings, lawsuits, audits, and other claims arising in the normal course of business. All such matters are subject to uncertainties and outcomes that are not predictable with assurance. Accruals for these items, when applicable, have been provided to the extent that losses are deemed probable and are reasonably estimable. These accruals are adjusted from time to time as developments warrant.
Although the ultimate outcome of these matters cannot be ascertained, on the basis of present information, amounts already provided, availability of insurance coverage and legal advice received, it is the opinion of management that the ultimate resolution of these proceedings, lawsuits, and other claims will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
In the Company's Form 10-K for the year ended December 31, 2023, the Company described the current status of litigation concerning the Lusher Site Remediation Group. In early July 2023, the Court granted the Company’s Rule 54(b) Motion for Final Judgment on previously dismissed claims and granted the Company’s Motion to Dismiss the plaintiff’s remaining claims against the defendants, without prejudice (the Company’s Motion to Dismiss having been joined by the remaining defendants in the litigation.) The only remaining issue pending in the litigation for the Court’s determination is the plaintiff’s motion to bar contribution claims. The Company has also been named as a potentially responsible party for the related Lusher Street Groundwater Contamination Superfund Site (the "Superfund Site") by the U.S. Environmental Protection Agency (the "EPA"). There has been no change in the status of the proceedings as described in the 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024. The Company does not currently believe that the litigation or the Superfund Site matter are likely to have a material adverse impact on its financial condition, results of operations, or cash flows. However, any litigation is inherently uncertain, the EPA has yet to select a final remedy for the Superfund Site, and any judgment or injunctive relief entered against us or any adverse settlement could materially and adversely impact our business, results of operations, financial condition, and prospects.
v3.24.3
SUBSEQUENT EVENTS
 9 Months Ended
Sep. 29, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTS
2024 Credit Facility
On October 24, 2024, the Company entered into the Fifth Amended and Restated Credit Agreement dated October 24, 2024 (the “2024 Credit Agreement”), under which the 2021 Credit Facility was increased to $1.0 billion from $925.0 million and the maturity date was extended to October 24, 2029 from August 20, 2027. The credit facility under the 2024 Credit Agreement (the "2024 Credit Facility") is comprised of an $875.0 million revolving credit facility (the "Revolver due 2029") and a $125.0 million term loan (the "Term Loan due 2029").
Under the terms of the 2024 Credit Agreement, the covenant requiring the Company to have a consolidated fixed charge coverage ratio of not more than 1.5 to 1.0 was replaced with a covenant requiring the Company to have an interest coverage ratio (the ratio of Consolidated EBITDA to Consolidated Interest Expense, as defined in the 2024 Credit Agreement) of not less than 3.0 to 1.0 tested on a quarterly basis.

6.375% Senior Notes due 2032
On October 22, 2024, the Company issued $500.0 million in aggregate principal amount of 6.375% senior notes due November 1, 2032 (the “6.375% Senior Notes”) in a transaction pursuant to Rule 144A under the Securities Act. The proceeds from the issuance were utilized to redeem all of the Company's $300.0 million aggregate principal amount of 7.50% Senior Notes due 2027 (the “7.50% Senior Notes”) on November 7, 2024, to repay a portion of the Company’s borrowings under its existing senior secured credit facility and pay fees and expenses in connection with the foregoing. Interest on the 6.375% Senior Notes is payable semi-annually on May 1 and November 1 of each year to holders of record at the close of business on April 15 and October 15 immediately preceding the interest payment date.
7.50% Senior Notes due 2027
On November 7, 2024, the Company redeemed all of its outstanding $300.0 million aggregate principal amount of its 7.50% Senior Notes.
1.75% Convertible Notes due 2028
On September 30, 2024, subsequent to the end of the Company’s fiscal third quarter of 2024, the conversion feature of the 1.75% Convertible Senior Notes due 2028 (the “1.75% Convertible Notes”) was triggered as the last reported price of our common stock was more than or equal to 130% of the conversion price (or $128.66) for at least 20 trading days in the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter ended September 30, 2024. Therefore, the 1.75% Convertible Notes are convertible, in whole or in part, at the option of the holders from October 1, 2024 to December 31, 2024. Whether the 1.75% Convertible Notes will be convertible following such period will depend on the continued satisfaction of this condition or another conversion condition in the future. We had not received any conversion notices from the triggering date of the conversion feature through the issuance date of our unaudited Condensed Consolidated Financial Statements of November 7, 2024. The Company has the intent and ability to utilize available borrowing capacity under the Revolver due 2029 to satisfy any cash conversion obligations that it may have, should holders choose to exercise their conversion rights during the period noted above.
v3.24.3
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Pay vs Performance Disclosure        
NET INCOME $ 40,866 $ 39,550 $ 123,843 $ 112,080
v3.24.3
Insider Trading Arrangements
 3 Months Ended
Sep. 29, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)
 9 Months Ended
Sep. 29, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Patrick Industries, Inc. (“Patrick”, the “Company”, "we", "our") contain all adjustments (consisting of normal recurring adjustments) that we believe are necessary to present fairly the Company’s financial position as of September 29, 2024 and December 31, 2023, its results of operations for the third quarter and nine months ended September 29, 2024 and October 1, 2023, respectively, and its cash flows for the nine months ended September 29, 2024 and October 1, 2023.
Patrick's unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The accompanying unaudited condensed consolidated financial statements for Patrick do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included.
Fiscal Periods
The Company maintains its financial records on the basis of a fiscal year ending on December 31, with the fiscal quarters spanning approximately thirteen weeks. The first quarter ends on the Sunday closest to the end of the first thirteen-week period. The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The third quarter of fiscal year 2024 ended on September 29, 2024, and the third quarter of fiscal year 2023 ended on October 1, 2023.
Reclassified Amounts
Reclassified Amounts
Certain amounts have been reclassified in prior year financial statements to conform with current year presentation. These reclassifications are immaterial to the overall financial statements.
New Accounting Standards and Accounting Pronouncements Not Yet Adopted
New Accounting Standards
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification.
The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s unaudited condensed consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures". This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early
adoption is also permitted. This ASU will likely result in additional required disclosures when adopted. The Company is currently evaluating this guidance to determine the impact on its disclosures; however, adoption will not otherwise impact our consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures". This ASU establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. The new standard is effective for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating this guidance to determine the impact on its disclosures; however, adoption will not otherwise impact our consolidated financial statements.
v3.24.3
REVENUE RECOGNITION (Tables)
 9 Months Ended
Sep. 29, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of Disaggregation of Revenue
In the following table, revenue from contracts with customers, net of all intercompany sales, is disaggregated by market type and by reportable segment:
Third Quarter Ended September 29, 2024
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$275,020 $121,476 $396,496 
Marine126,066 9,925 135,991 
Powersports84,487 2,903 87,390 
Manufactured Housing76,634 100,780 177,414 
Industrial113,319 8,834 122,153 
Total$675,526 $243,918 $919,444 
Third Quarter Ended October 1, 2023
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$273,804 $126,300 $400,104 
Marine162,976 8,676 171,652 
Powersports26,015 2,768 28,783 
Manufactured Housing66,671 79,030 145,701 
Industrial111,719 8,114 119,833 
Total$641,185 $224,888 $866,073 
Nine Months Ended September 29, 2024
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$876,170 $391,050 $1,267,220 
Marine417,485 31,499 448,984 
Powersports264,795 9,115 273,910 
Manufactured Housing223,532 284,618 508,150 
Industrial344,799 26,497 371,296 
Total$2,126,781 $742,779 $2,869,560 
Nine Months Ended October 1, 2023
($ in thousands)ManufacturingDistributionTotal
Market type:
Recreational Vehicle$780,993 $369,643 $1,150,636 
Marine604,514 31,451 635,965 
Powersports88,240 9,834 98,074 
Manufactured Housing196,179 226,919 423,098 
Industrial351,753 27,332 379,085 
Total$2,021,679 $665,179 $2,686,858 
v3.24.3
INVENTORY (Tables)
 9 Months Ended
Sep. 29, 2024
Inventory Disclosure [Abstract]  
Schedule of Inventory
Inventories consisted of the following:
($ in thousands)September 29, 2024December 31, 2023
Raw materials$302,202 $269,786 
Work in process18,647 16,596 
Finished goods106,416 107,675 
Less: reserve for inventory obsolescence(19,016)(15,990)
  Total manufactured goods, net408,249 378,067 
Materials purchased for resale (distribution products)148,574 140,147 
Less: reserve for inventory obsolescence(11,378)(8,081)
  Total materials purchased for resale (distribution products), net137,196 132,066 
Total inventories$545,445 $510,133 
v3.24.3
GOODWILL AND INTANGIBLE ASSETS (Tables)
 9 Months Ended
Sep. 29, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
Changes in the carrying amount of goodwill for the nine months ended September 29, 2024 by segment are as follows:
($ in thousands)ManufacturingDistributionTotal
Balance at December 31, 2023$560,370 $77,023 $637,393 
Acquisitions119,150 33,051 152,201 
Adjustments to preliminary purchase price allocations60 (237)(177)
Balance at September 29, 2024
$679,580 $109,837 $789,417 
Schedule of Intangible Assets, Net
Intangible assets, net consisted of the following as of September 29, 2024 and December 31, 2023:
($ in thousands)September 29, 2024December 31, 2023
Customer relationships$932,939 $729,664 
Non-compete agreements29,846 21,561 
Patents87,674 69,401 
Trademarks226,527 197,027 
Intangible assets, gross1,276,986 1,017,653 
Less: accumulated amortization(438,045)(366,500)
Intangible assets, net$838,941 $651,153 
Schedule of Changes in Intangible Assets
Changes in the carrying value of intangible assets for the nine months ended September 29, 2024 by segment are as follows:
($ in thousands)ManufacturingDistributionTotal
Balance at December 31, 2023$553,703 $97,450 $651,153 
Additions197,999 61,690 259,689 
Amortization(61,428)(10,117)(71,545)
Adjustments to preliminary purchase price allocations— (356)(356)
Balance at September 29, 2024
$690,274 $148,667 $838,941 
v3.24.3
ACQUISITIONS (Tables)
 9 Months Ended
Sep. 29, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Schedule of Asset Acquisition, Contingent Consideration
Changes in the fair value of contingent consideration for the nine months ended September 29, 2024 are as follows:
($ in thousands)
Balance at December 31, 2023$8,510 
Additions3,131 
Fair value adjustments (1)
(1,900)
Settlements(4,976)
Balance at September 29, 2024
$4,765 
(1)The Company recorded a measurement period adjustment reducing the estimated fair value of contingent consideration in connection with one of the 2023 acquisitions.
The following table shows the balance sheet location of the fair value of contingent consideration and the maximum amount of contingent consideration payments the Company may be subject to as of September 29, 2024 and December 31, 2023:
($ in thousands)September 29, 2024December 31, 2023
Accrued liabilities$1,694 $7,500 
Other long-term liabilities3,071 1,010 
Total fair value of contingent consideration$4,765 $8,510 
Maximum amount of contingent consideration$8,665 $8,510 
Schedule of Business Acquisitions, by Acquisition
The Company completed seven acquisitions in the first nine months ended September 29, 2024, including the following previously announced acquisitions:
CompanySegmentDescription
Sportech, LLC ("Sportech")Manufacturing
Leading designer and manufacturer of high-value, complex component solutions sold to powersports original equipment manufacturers ("OEMs"), adjacent market OEMs and the aftermarket, including integrated door systems, roofs, canopies, bumpers, windshields, fender flares and cowls, based in Elk River, Minnesota, acquired in January 2024.
ICON Direct LLC ("RecPro")DistributionLeading e-commerce business and aftermarket platform specializing in creating and marketing component products, systems, and solutions for the RV and marine end markets, based in Bristol, Indiana, acquired in September 2024
The Company completed three acquisitions in the year ended December 31, 2023, including the following previously announced acquisition (collectively, the “2023 Acquisitions”):
CompanySegmentDescription
BTI TransportDistributionProvider of transportation and logistics services to marine OEMs and dealers, based in Elkhart, Indiana, acquired in April 2023. The acquired business operates under the Patrick Marine Transport brand.
Schedule of Assets Acquired and Liabilities Assumed
The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of acquisition for the 2024 Acquisitions and 2023 Acquisitions:
2024
Acquisitions		2023
Acquisitions
($ in thousands)SportechAll OthersTotalTotal
Consideration:
Cash, net of cash acquired$319,073 $92,586 $411,659 $26,294 
Working capital holdback and other, net— 4,824 4,824 — 
Contingent consideration (1)
— 3,130 3,130 1,600 
Total consideration$319,073 $100,540 $419,613 $27,894 
Assets Acquired:
Trade receivables$21,588 $2,246 $23,834 $1,293 
Inventories21,021 17,095 38,116 4,430 
Prepaid expenses & other1,810 4,316 6,126 105 
Property, plant & equipment18,768 4,043 22,811 8,165 
Operating lease right-of-use assets15,096 1,283 16,379 1,044 
Identifiable intangible assets
Customer relationships151,000 25,780 176,780 10,075 
Non-compete agreements2,000 6,445 8,445 270 
Patents and developed technology17,500 600 18,100 — 
Trademarks21,500 9,000 30,500 — 
Liabilities Assumed:
Current portion of operating lease obligations(1,437)(585)(2,022)(262)
Accounts payable & accrued liabilities(32,145)(3,867)(36,012)(514)
Operating lease obligations(13,658)(699)(14,357)(781)
Deferred tax liabilities(21,288)— (21,288)— 
Total fair value of net assets acquired201,755 65,657 267,412 23,825 
Goodwill (2)
117,318 34,883 152,201 5,814 
Bargain purchase gain (3)
— — — (1,745)
$319,073 $100,540 $419,613 $27,894 
(1)These amounts reflect the acquisition date fair value of contingent consideration based on expected future results relating to certain acquisitions.
(2)Goodwill is tax-deductible for all acquisitions, except Sportech, which is only partially tax-deductible.
(3)In connection with one of the 2023 Acquisitions, the Company recognized a $1.7 million bargain purchase gain. A bargain purchase gain is recognized when the net assets acquired in a business combination have a higher fair value than the consideration paid. This gain is primarily attributable to the fair value assigned to customer relationships in that acquisition and is included in "Selling, general, and administrative" in the consolidated statement of income for the year ended December 31, 2023
Schedule of Pro Forma Information In addition, the pro forma information includes incremental amortization expense, in the aggregate, related to intangible assets acquired in connection with the transactions of $0.4 million and $4.0 million, respectively, for the third quarter and nine months ended September 29, 2024 and $3.0 million and $12.3 million, respectively, for the third quarter and nine months ended October 1, 2023.
 
Third Quarter Ended
Nine Months Ended
($ in thousands, except per share data)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Revenue$933,100 $955,841 $2,949,044 $2,970,700 
Net income$42,115 $41,374 $128,829 $118,141 
Basic earnings per common share$1.94 $1.92 $5.94 $5.48 
Diluted earnings per common share$1.86 $1.89 $5.78 $5.36 
v3.24.3
EARNINGS PER COMMON SHARE (Tables)
 9 Months Ended
Sep. 29, 2024
Earnings Per Share [Abstract]  
Schedule of Net Income Per Share
Earnings per common share calculated for the third quarter and first nine months of 2024 and 2023 is as follows:
 
Third Quarter Ended
Nine Months Ended
($ in thousands, except per share data)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Numerator:
Earnings for basic earnings per common share calculation$40,866 $39,550 $123,843 $112,080 
Effect of interest on potentially dilutive convertible notes, net of tax— — — 162 
Earnings for diluted earnings per common share calculation$40,866 $39,550 $123,843 $112,242 
Denominator:
Weighted average common shares outstanding - basic21,74021,51121,70621,541
Weighted average impact of potentially dilutive convertible notes554—340221
Weighted average impact of potentially dilutive warrants117 — 39 — 
Weighted average impact of potentially dilutive securities230373212301
Weighted average common shares outstanding - diluted22,64121,88422,29722,063
Earnings per common share:
Basic earnings per common share$1.88 $1.84 $5.71 $5.20 
Diluted earnings per common share$1.80 $1.81 $5.55 $5.09 
v3.24.3
DEBT (Tables)
 9 Months Ended
Sep. 29, 2024
Debt Disclosure [Abstract]  
Schedule of Total Debt Outstanding
A summary of total debt outstanding at September 29, 2024 and December 31, 2023 is as follows:
($ in thousands)September 29, 2024December 31, 2023
Long-term debt:
Term loan due 2027$125,625 $129,375 
Revolver due 2027365,000 — 
7.50% senior notes due 2027
300,000 300,000 
1.75% convertible notes due 2028
258,750 258,750 
4.75% senior notes due 2029
350,000 350,000 
Total debt1,399,375 1,038,125 
Less: convertible notes deferred financing costs, net(4,169)(4,917)
Less: term loan deferred financing costs, net(434)(548)
Less: senior notes deferred financing costs, net(5,795)(6,804)
Less: current maturities of long-term debt(11,250)(7,500)
Total long-term debt, less current maturities, net$1,377,727 $1,018,356 
v3.24.3
FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 29, 2024
Fair Value Disclosures [Abstract]  
Schedule of Assets Measured at Fair Value on a Recurring Basis
The following table presents fair values of certain assets and liabilities as of September 29, 2024 and December 31, 2023:
September 29, 2024December 31, 2023
($ in millions)Level 1Level 2Level 3Level 1Level 2Level 3
7.50% senior notes due 2027 (1)
$— $300.5 $— $— $303.7 $— 
4.75% senior notes due 2029 (1)
$— $333.5 $— $— $320.2 $— 
1.75% convertible notes due 2028 (1)
$— $392.6 $— $— $295.2 $— 
Term loan due 2027 (2)
$— $125.6 $— $— $129.4 $— 
Revolver due 2027 (2)
$— $365.0 $— $— $— $— 
Contingent consideration (3)
$— $— $4.8 $— $— $8.5 
(1)The amounts of these notes listed above are the current fair values for disclosure purposes only, and they are recorded in the Company's condensed consolidated balance sheets as of September 29, 2024 and December 31, 2023 using the interest rate method.
(2)The carrying amounts of our Term loan due 2027 and Revolver due 2027 approximate fair value as of September 29, 2024 and December 31, 2023 based upon their terms and conditions in comparison to the terms and conditions of debt instruments with similar terms and conditions available at those dates.
(3)The estimated fair value of the Company's contingent consideration is discussed further in Note 5 "Acquisitions".
v3.24.3
SEGMENT INFORMATION (Tables)
 9 Months Ended
Sep. 29, 2024
Segment Reporting [Abstract]  
Schedule of Segment Reporting Information
The following table presents a reconciliation of segment sales and operating income to consolidated net sales and operating income:
Third Quarter EndedNine Months Ended
($ in thousands)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Segment net sales:
Manufacturing$685,296 $659,493 $2,139,598 $2,072,599 
Distribution239,135 226,859 747,269 671,764 
Eliminations (1)
(4,987)(20,279)(17,307)(57,505)
Consolidated net sales$919,444 $866,073 $2,869,560 $2,686,858 
Operating income for reportable segments:
Manufacturing$86,429 $80,777 $282,631 $263,146 
Distribution23,400 24,026 77,278 68,172 
Unallocated corporate expenses(10,963)(14,221)(69,916)(69,341)
Amortization(24,449)(19,507)(71,545)(59,093)
Consolidated operating income$74,417 $71,075 $218,448 $202,884 
(1)Eliminations in the third quarter and nine months ended September 29, 2024 includes only the elimination of inter-segment transactions.
Schedule of the Reconciliation of Segment Operations
The following table presents an allocation of total assets to the reportable segments of the Company and a reconciliation to consolidated total assets:
($ in thousands)September 29, 2024December 31, 2023
Manufacturing assets$2,467,214 $2,071,500 
Distribution assets540,664 426,931 
Assets for reportable segments3,007,878 2,498,431 
Corporate assets unallocated to segments62,469 52,608 
Cash and cash equivalents52,606 11,409 
Consolidated total assets$3,122,953 $2,562,448 
v3.24.3
STOCK REPURCHASE PROGRAMS (Tables)
 9 Months Ended
Sep. 29, 2024
Equity [Abstract]  
Schedule of Repurchases of Common Stock Under the stock repurchase plan, the Company made repurchases of common stock as follows for the respective periods:
 
Third Quarter Ended
Nine Months Ended
($ in millions, except average price data)September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Shares repurchased— 6,184 — 185,993
Average price$— $74.43 $— $65.79 
Aggregate cost$— $0.5 $— $12.2 
v3.24.3
REVENUE RECOGNITION (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Disaggregation of Revenue [Line Items]        
NET SALES $ 919,444 $ 866,073 $ 2,869,560 $ 2,686,858
Recreational Vehicle        
Disaggregation of Revenue [Line Items]        
NET SALES 396,496 400,104 1,267,220 1,150,636
Marine        
Disaggregation of Revenue [Line Items]        
NET SALES 135,991 171,652 448,984 635,965
Powersports        
Disaggregation of Revenue [Line Items]        
NET SALES 87,390 28,783 273,910 98,074
Manufactured Housing        
Disaggregation of Revenue [Line Items]        
NET SALES 177,414 145,701 508,150 423,098
Industrial        
Disaggregation of Revenue [Line Items]        
NET SALES 122,153 119,833 371,296 379,085
Manufacturing        
Disaggregation of Revenue [Line Items]        
NET SALES 675,526 641,185 2,126,781 2,021,679
Manufacturing | Recreational Vehicle        
Disaggregation of Revenue [Line Items]        
NET SALES 275,020 273,804 876,170 780,993
Manufacturing | Marine        
Disaggregation of Revenue [Line Items]        
NET SALES 126,066 162,976 417,485 604,514
Manufacturing | Powersports        
Disaggregation of Revenue [Line Items]        
NET SALES 84,487 26,015 264,795 88,240
Manufacturing | Manufactured Housing        
Disaggregation of Revenue [Line Items]        
NET SALES 76,634 66,671 223,532 196,179
Manufacturing | Industrial        
Disaggregation of Revenue [Line Items]        
NET SALES 113,319 111,719 344,799 351,753
Distribution        
Disaggregation of Revenue [Line Items]        
NET SALES 243,918 224,888 742,779 665,179
Distribution | Recreational Vehicle        
Disaggregation of Revenue [Line Items]        
NET SALES 121,476 126,300 391,050 369,643
Distribution | Marine        
Disaggregation of Revenue [Line Items]        
NET SALES 9,925 8,676 31,499 31,451
Distribution | Powersports        
Disaggregation of Revenue [Line Items]        
NET SALES 2,903 2,768 9,115 9,834
Distribution | Manufactured Housing        
Disaggregation of Revenue [Line Items]        
NET SALES 100,780 79,030 284,618 226,919
Distribution | Industrial        
Disaggregation of Revenue [Line Items]        
NET SALES $ 8,834 $ 8,114 $ 26,497 $ 27,332
v3.24.3
INVENTORY (Details) - USD ($)
$ in Thousands
Sep. 29, 2024
Dec. 31, 2023
Inventory [Line Items]    
Raw materials $ 302,202 $ 269,786
Work in process 18,647 16,596
Finished goods 106,416 107,675
Total manufactured goods, net 408,249 378,067
Materials purchased for resale (distribution products) 148,574 140,147
Total materials purchased for resale (distribution products), net 137,196 132,066
Total inventories 545,445 510,133
Manufactured Goods    
Inventory [Line Items]    
Less: reserve for inventory obsolescence (19,016) (15,990)
Distributed Goods    
Inventory [Line Items]    
Less: reserve for inventory obsolescence $ (11,378) $ (8,081)
v3.24.3
GOODWILL AND INTANGIBLE ASSETS - Carrying Amount of Goodwill by Segment (Details)
$ in Thousands
 9 Months Ended
Sep. 29, 2024
USD ($)
Goodwill [Roll Forward]  
Beginning balance $ 637,393
Acquisitions 152,201
Adjustments to preliminary purchase price allocations (177)
Ending balance 789,417
Manufacturing  
Goodwill [Roll Forward]  
Beginning balance 560,370
Acquisitions 119,150
Adjustments to preliminary purchase price allocations 60
Ending balance 679,580
Distribution  
Goodwill [Roll Forward]  
Beginning balance 77,023
Acquisitions 33,051
Adjustments to preliminary purchase price allocations (237)
Ending balance $ 109,837
v3.24.3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets, Net, by Major Class (Details) - USD ($)
$ in Thousands
Sep. 29, 2024
Dec. 31, 2023
Intangible Assets [Line Items]    
Intangible assets, gross $ 1,276,986 $ 1,017,653
Less: accumulated amortization (438,045) (366,500)
Intangible assets, net 838,941 651,153
Trademarks    
Intangible Assets [Line Items]    
Trademarks 226,527 197,027
Customer relationships    
Intangible Assets [Line Items]    
Finite-lived intangible assets, gross 932,939 729,664
Non-compete agreements    
Intangible Assets [Line Items]    
Finite-lived intangible assets, gross 29,846 21,561
Patents    
Intangible Assets [Line Items]    
Finite-lived intangible assets, gross $ 87,674 $ 69,401
v3.24.3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets by Segment (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Intangible Assets [Roll Forward]        
Beginning balance     $ 651,153  
Additions     259,689  
Amortization $ (24,449) $ (19,507) (71,545) $ (59,093)
Adjustments to preliminary purchase price allocations     (356)  
Ending balance 838,941   838,941  
Manufacturing | Operating Segments        
Intangible Assets [Roll Forward]        
Beginning balance     553,703  
Additions     197,999  
Amortization     (61,428)  
Adjustments to preliminary purchase price allocations     0  
Ending balance 690,274   690,274  
Distribution | Operating Segments        
Intangible Assets [Roll Forward]        
Beginning balance     97,450  
Additions     61,690  
Amortization     (10,117)  
Adjustments to preliminary purchase price allocations     (356)  
Ending balance $ 148,667   $ 148,667  
v3.24.3
ACQUISITIONS - Narrative (Details)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 29, 2024
USD ($)
acquisition
Oct. 01, 2023
USD ($)
acquisition
Sep. 29, 2024
USD ($)
acquisition
Oct. 01, 2023
USD ($)
acquisition
Dec. 31, 2023
USD ($)
acquisition
Business Acquisition [Line Items]          
Total sales $ 919,444 $ 866,073 $ 2,869,560 $ 2,686,858  
Operating income (loss) $ 74,417 $ 71,075 218,448 202,884  
Cash, net of cash acquired     $ 411,566 $ 26,009  
Customer relationships          
Business Acquisition [Line Items]          
Estimated useful life (in years)     10 years    
Non-compete agreements          
Business Acquisition [Line Items]          
Estimated useful life (in years)     5 years    
Patents and developed technology          
Business Acquisition [Line Items]          
Estimated useful life (in years)     10 years    
2024 Acquisitions          
Business Acquisition [Line Items]          
Number of acquisitions | acquisition 1   7    
Total sales $ 78,600   $ 216,400    
Operating income (loss) 12,300   38,900    
Acquisition related costs $ 5,000        
Cash, net of cash acquired     $ 411,700    
Contingent consideration, performance period (in years)     3 years    
Certain Acquisitions          
Business Acquisition [Line Items]          
Number of acquisitions | acquisition     5   2
2023 Acquisitions          
Business Acquisition [Line Items]          
Number of acquisitions | acquisition   3   3 3
Total sales   $ 7,300   $ 9,800  
Operating income (loss)   $ (100)   $ 100  
Cash, net of cash acquired         $ 26,294
Contingent consideration, performance period (in years)         2 years
v3.24.3
ACQUISITIONS - Fair Values Contingent Consideration (Details) - Contingent Consideration Liability
$ in Thousands
 9 Months Ended
Sep. 29, 2024
USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]  
Balance at December 31, 2023 $ 8,510
Additions 3,131
Fair value adjustments (1,900)
Settlements (4,976)
Balance at September 29, 2024 $ 4,765
v3.24.3
ACQUISITIONS - Contingent Consideration Payments (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 29, 2024
Dec. 31, 2023
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]    
Accrued liabilities $ 1,694 $ 7,500
Other long-term liabilities 3,071 1,010
Total fair value of contingent consideration 4,765 8,510
Maximum amount of contingent consideration $ 8,665 $ 8,510
v3.24.3
ACQUISITIONS - Assets Acquired and Liabilities Assumed (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Dec. 31, 2023
Consideration:      
Cash, net of cash acquired $ 411,566 $ 26,009  
Assets Acquired:      
Operating lease right-of-use assets 205,110   $ 177,717
Liabilities Assumed:      
Goodwill 789,417   637,393
Sportech      
Consideration:      
Cash, net of cash acquired 319,073    
Working capital holdback and other, net 0    
Contingent consideration 0    
Total consideration 319,073    
Assets Acquired:      
Trade receivables 21,588    
Inventories 21,021    
Prepaid expenses & other 1,810    
Property, plant & equipment 18,768    
Operating lease right-of-use assets 15,096    
Liabilities Assumed:      
Current portion of operating lease obligations (1,437)    
Accounts payable & accrued liabilities (32,145)    
Operating lease obligations (13,658)    
Deferred tax liabilities (21,288)    
Total fair value of net assets acquired 201,755    
Goodwill 117,318    
Bargain purchase gain 0    
Total net assets acquired 319,073    
Sportech | Trademarks      
Assets Acquired:      
Identifiable intangible assets 21,500    
Sportech | Customer relationships      
Assets Acquired:      
Identifiable intangible assets 151,000    
Sportech | Non-compete agreements      
Assets Acquired:      
Identifiable intangible assets 2,000    
Sportech | Patents and developed technology      
Assets Acquired:      
Identifiable intangible assets 17,500    
All Others      
Consideration:      
Cash, net of cash acquired 92,586    
Working capital holdback and other, net 4,824    
Contingent consideration 3,130    
Total consideration 100,540    
Assets Acquired:      
Trade receivables 2,246    
Inventories 17,095    
Prepaid expenses & other 4,316    
Property, plant & equipment 4,043    
Operating lease right-of-use assets 1,283    
Liabilities Assumed:      
Current portion of operating lease obligations (585)    
Accounts payable & accrued liabilities (3,867)    
Operating lease obligations (699)    
Deferred tax liabilities 0    
Total fair value of net assets acquired 65,657    
Goodwill 34,883    
Bargain purchase gain 0    
Total net assets acquired 100,540    
All Others | Trademarks      
Assets Acquired:      
Identifiable intangible assets 9,000    
All Others | Customer relationships      
Assets Acquired:      
Identifiable intangible assets 25,780    
All Others | Non-compete agreements      
Assets Acquired:      
Identifiable intangible assets 6,445    
All Others | Patents and developed technology      
Assets Acquired:      
Identifiable intangible assets 600    
Acquired Entities      
Consideration:      
Cash, net of cash acquired 411,659    
Working capital holdback and other, net 4,824    
Contingent consideration 3,130    
Total consideration 419,613    
Assets Acquired:      
Trade receivables 23,834    
Inventories 38,116    
Prepaid expenses & other 6,126    
Property, plant & equipment 22,811    
Operating lease right-of-use assets 16,379    
Liabilities Assumed:      
Current portion of operating lease obligations (2,022)    
Accounts payable & accrued liabilities (36,012)    
Operating lease obligations (14,357)    
Deferred tax liabilities (21,288)    
Total fair value of net assets acquired 267,412    
Goodwill 152,201    
Bargain purchase gain 0    
Total net assets acquired 419,613    
Acquired Entities | Trademarks      
Assets Acquired:      
Identifiable intangible assets 30,500    
Acquired Entities | Customer relationships      
Assets Acquired:      
Identifiable intangible assets 176,780    
Acquired Entities | Non-compete agreements      
Assets Acquired:      
Identifiable intangible assets 8,445    
Acquired Entities | Patents and developed technology      
Assets Acquired:      
Identifiable intangible assets $ 18,100    
2023 Acquisitions      
Consideration:      
Cash, net of cash acquired     26,294
Working capital holdback and other, net     0
Contingent consideration     1,600
Total consideration     27,894
Assets Acquired:      
Trade receivables     1,293
Inventories     4,430
Prepaid expenses & other     105
Property, plant & equipment     8,165
Operating lease right-of-use assets     1,044
Liabilities Assumed:      
Current portion of operating lease obligations     (262)
Accounts payable & accrued liabilities     (514)
Operating lease obligations     (781)
Deferred tax liabilities     0
Total fair value of net assets acquired     23,825
Goodwill     5,814
Bargain purchase gain     (1,745)
Total net assets acquired     27,894
2023 Acquisitions | Trademarks      
Assets Acquired:      
Identifiable intangible assets     0
2023 Acquisitions | Customer relationships      
Assets Acquired:      
Identifiable intangible assets     10,075
2023 Acquisitions | Non-compete agreements      
Assets Acquired:      
Identifiable intangible assets     270
2023 Acquisitions | Patents and developed technology      
Assets Acquired:      
Identifiable intangible assets     $ 0
v3.24.3
ACQUISITIONS - Pro Forma Information Related to Acquisitions (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]        
Pro forma amortization expense $ 400 $ 3,000 $ 4,000 $ 12,300
Revenue 933,100 955,841 2,949,044 2,970,700
Net income $ 42,115 $ 41,374 $ 128,829 $ 118,141
Basic earnings per common share (in dollars per share) $ 1.94 $ 1.92 $ 5.94 $ 5.48
Diluted earnings per common share (in dollars per share) $ 1.86 $ 1.89 $ 5.78 $ 5.36
v3.24.3
STOCK-BASED COMPENSATION (Details) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 9 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Share-Based Payment Arrangement [Abstract]        
Granted shares (in shares)     223,011  
Average fair value of shares granted (in dollars per share)     $ 100.63  
Fair value of shares granted, amount     $ 22.4  
Share-based compensation expense $ 4.7 $ 5.8 $ 14.4 $ 13.7
v3.24.3
EARNINGS PER COMMON SHARE (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Numerator:        
Earnings for basic earnings per common share calculation $ 40,866 $ 39,550 $ 123,843 $ 112,080
Effect of interest on potentially dilutive convertible notes, net of tax 0 0 0 162
Earnings for diluted earnings per common share calculation $ 40,866 $ 39,550 $ 123,843 $ 112,242
Denominator:        
Weighted average common shares outstanding - basic (in shares) 21,740 21,511 21,706 21,541
Weighted average impact of potentially dilutive convertible notes (in shares) 554 0 340 221
Weighted average impact of potentially dilutive warrants (in shares) 117 0 39 0
Weighted average impact of potentially dilutive securities (in shares) 230 373 212 301
Weighted average common shares outstanding - diluted (in shares) 22,641 21,884 22,297 22,063
Earnings per common share:        
Basic earnings per common share (in dollars per share) $ 1.88 $ 1.84 $ 5.71 $ 5.20
Diluted earnings per common share (in dollars per share) $ 1.80 $ 1.81 $ 5.55 $ 5.09
v3.24.3
DEBT - Long-term Debt (Details) - USD ($)
$ in Thousands
Sep. 29, 2024
Dec. 31, 2023
Debt Instrument [Line Items]    
Total debt $ 1,399,375 $ 1,038,125
Less: current maturities of long-term debt (11,250) (7,500)
Total long-term debt, less current maturities, net 1,377,727 1,018,356
Convertible Debt    
Debt Instrument [Line Items]    
Less: deferred financing costs, net (4,169) (4,917)
Term Loan    
Debt Instrument [Line Items]    
Total debt 125,625 129,375
Less: deferred financing costs, net (434) (548)
Revolver due 2027    
Debt Instrument [Line Items]    
Total debt 365,000 0
Senior Notes    
Debt Instrument [Line Items]    
Less: deferred financing costs, net $ (5,795) $ (6,804)
7.50% senior notes due 2027 | Senior Notes    
Debt Instrument [Line Items]    
Stated interest rate (as a percent) 7.50% 7.50%
Total debt $ 300,000 $ 300,000
1.75% convertible notes due 2028    
Debt Instrument [Line Items]    
Stated interest rate (as a percent) 1.75% 1.75%
1.75% convertible notes due 2028 | Convertible Debt    
Debt Instrument [Line Items]    
Total debt $ 258,750 $ 258,750
4.75% senior notes due 2029 | Senior Notes    
Debt Instrument [Line Items]    
Stated interest rate (as a percent) 4.75% 4.75%
Total debt $ 350,000 $ 350,000
v3.24.3
DEBT - Narrative (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Line of Credit Facility [Line Items]        
Interest paid $ 4,700,000 $ 8,100,000 $ 44,900,000 $ 40,800,000
Revolving Credit Facility        
Line of Credit Facility [Line Items]        
Debt instrument, basis spread on variable rate (as a percent)     1.75%  
Debt instrument, effective interest rate (as a percent) 6.71%   6.71%  
Unused capacity, commitment fee (as a percent)     0.225%  
2021 Credit Facility | Revolving Credit Facility        
Line of Credit Facility [Line Items]        
Maximum borrowing capacity $ 775,000,000   $ 775,000,000  
2021 Credit Facility | Term Loan Due 2027        
Line of Credit Facility [Line Items]        
Maximum borrowing capacity $ 150,000,000   $ 150,000,000  
v3.24.3
FAIR VALUE MEASUREMENTS (Details) - USD ($)
$ in Millions
Sep. 29, 2024
Dec. 31, 2023
7.50% senior notes due 2027 | Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Stated interest rate (as a percent) 7.50% 7.50%
4.75% senior notes due 2029 | Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Stated interest rate (as a percent) 4.75% 4.75%
1.75% convertible notes due 2028    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Stated interest rate (as a percent) 1.75% 1.75%
Level 1 | Term Loan    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Term loan due $ 0.0 $ 0.0
Level 1 | Revolver due 2027    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Revolver due 0.0 0.0
Level 1 | 7.50% senior notes due 2027 | Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Senior notes 0.0 0.0
Level 1 | 4.75% senior notes due 2029 | Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Senior notes 0.0 0.0
Level 1 | 1.75% convertible notes due 2028 | Convertible Note    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Convertible note 0.0 0.0
Level 1 | Contingent consideration    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Contingent consideration 0.0 0.0
Level 2 | Term Loan    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Term loan due 125.6 129.4
Level 2 | Revolver due 2027    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Revolver due 365.0 0.0
Level 2 | 7.50% senior notes due 2027 | Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Senior notes 300.5 303.7
Level 2 | 4.75% senior notes due 2029 | Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Senior notes 333.5 320.2
Level 2 | 1.75% convertible notes due 2028 | Convertible Note    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Convertible note 392.6 295.2
Level 2 | Contingent consideration    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Contingent consideration 0.0 0.0
Level 3 | Term Loan    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Term loan due 0.0 0.0
Level 3 | Revolver due 2027    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Revolver due 0.0 0.0
Level 3 | 7.50% senior notes due 2027 | Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Senior notes 0.0 0.0
Level 3 | 4.75% senior notes due 2029 | Senior Notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Senior notes 0.0 0.0
Level 3 | 1.75% convertible notes due 2028 | Convertible Note    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Convertible note 0.0 0.0
Level 3 | Contingent consideration    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Contingent consideration $ 4.8 $ 8.5
v3.24.3
INCOME TAXES (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Income Tax Disclosure [Abstract]        
Effective income tax rate (as a percent) 24.80% 27.00% 21.60% 24.90%
Excess tax benefit tax     $ 6.7 $ 2.3
Income taxes paid $ 18.2 $ 16.9 $ 37.4 $ 65.9
v3.24.3
SEGMENT INFORMATION - Sales and Operating Income of Segments (Details)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2024
USD ($)
Oct. 01, 2023
USD ($)
Sep. 29, 2024
USD ($)
segment
Oct. 01, 2023
USD ($)
Segment Reporting Information [Line Items]        
Number of reportable segments (in segments) | segment     2  
Total sales $ 919,444 $ 866,073 $ 2,869,560 $ 2,686,858
Consolidated operating income 74,417 71,075 218,448 202,884
Unallocated corporate expenses (138,097) (128,044) (430,215) (400,447)
Amortization of intangible assets 24,449 19,507 71,545 59,093
Eliminations        
Segment Reporting Information [Line Items]        
Total sales (4,987) (20,279) (17,307) (57,505)
Segment Reconciling Items        
Segment Reporting Information [Line Items]        
Unallocated corporate expenses (10,963) (14,221) (69,916) (69,341)
Amortization of intangible assets 24,449 19,507 71,545 59,093
Manufacturing        
Segment Reporting Information [Line Items]        
Total sales 675,526 641,185 2,126,781 2,021,679
Manufacturing | Operating Segments        
Segment Reporting Information [Line Items]        
Total sales 685,296 659,493 2,139,598 2,072,599
Consolidated operating income 86,429 80,777 282,631 263,146
Amortization of intangible assets     61,428  
Distribution        
Segment Reporting Information [Line Items]        
Total sales 243,918 224,888 742,779 665,179
Distribution | Operating Segments        
Segment Reporting Information [Line Items]        
Total sales 239,135 226,859 747,269 671,764
Consolidated operating income $ 23,400 $ 24,026 77,278 $ 68,172
Amortization of intangible assets     $ 10,117  
v3.24.3
SEGMENT INFORMATION - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($)
$ in Thousands
Sep. 29, 2024
Dec. 31, 2023
Segment Reporting Information [Line Items]    
Assets $ 3,122,953 $ 2,562,448
Operating Segments    
Segment Reporting Information [Line Items]    
Assets 3,007,878 2,498,431
Corporate, Non-Segment    
Segment Reporting Information [Line Items]    
Assets 62,469 52,608
Segment Reconciling Items    
Segment Reporting Information [Line Items]    
Assets 52,606 11,409
Manufacturing | Operating Segments    
Segment Reporting Information [Line Items]    
Assets 2,467,214 2,071,500
Distribution | Operating Segments    
Segment Reporting Information [Line Items]    
Assets $ 540,664 $ 426,931
v3.24.3
STOCK REPURCHASE PROGRAMS - Narrative (Details) - Shareholder Repurchase Program - USD ($)
 1 Months Ended
Dec. 31, 2022
Sep. 29, 2024
Share Repurchase Program [Line Items]    
Remaining authorized shares to be purchased amount $ 38,200,000  
Board of Directors Chairman    
Share Repurchase Program [Line Items]    
Share repurchase program period (in months) 24 months  
Authorized share repurchase program amount $ 100,000,000  
Remaining authorized shares to be purchased amount   $ 77,600,000
v3.24.3
STOCK REPURCHASE PROGRAMS - Repurchases of Shares Under the Repurchase Plan (Details) - Shareholder Repurchase Program - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 9 Months Ended
Sep. 29, 2024
Oct. 01, 2023
Sep. 29, 2024
Oct. 01, 2023
Equity, Class of Treasury Stock [Line Items]        
Shares repurchased (in shares) 0 6,184 0 185,993
Average price (in dollars per share) $ 0 $ 74.43 $ 0 $ 65.79
Aggregate cost $ 0.0 $ 0.5 $ 0.0 $ 12.2
v3.24.3
SUBSEQUENT EVENTS (Details)
Oct. 24, 2024
USD ($)
Sep. 30, 2024
day
$ / shares
Nov. 07, 2024
USD ($)
Oct. 23, 2024
USD ($)
Oct. 22, 2024
USD ($)
Sep. 29, 2024
Dec. 31, 2023
1.75% convertible notes due 2028              
Subsequent Event [Line Items]              
Stated interest rate (as a percent)           1.75% 1.75%
Subsequent Event | 2024 Credit Facility              
Subsequent Event [Line Items]              
Maximum borrowing capacity $ 1,000,000,000.0     $ 925,000,000      
Consolidated fixed charge coverage ratio, actual 150.00%            
Interest coverage ratio 3.0            
Subsequent Event | 2024 Credit Facility | Revolving Credit Facility | Revolver due 2027              
Subsequent Event [Line Items]              
Maximum borrowing capacity $ 875,000,000            
Subsequent Event | 2024 Credit Facility | Term Loan Due 2029              
Subsequent Event [Line Items]              
Maximum borrowing capacity $ 125,000,000            
Subsequent Event | 6.375% Senior Notes Due 2032 | Senior Notes              
Subsequent Event [Line Items]              
Debt instrument, face amount         $ 500,000,000    
Stated interest rate (as a percent)         6.375%    
Subsequent Event | 7.50% Senior Notes Due 2027 | Senior Notes              
Subsequent Event [Line Items]              
Debt instrument, face amount     $ 300,000,000   $ 300,000,000    
Stated interest rate (as a percent)     7.50%   7.50%    
Subsequent Event | 1.75% convertible notes due 2028              
Subsequent Event [Line Items]              
Threshold percentage of stock price trigger   130.00%          
Threshold consecutive trading days | day   30          
Subsequent Event | 1.75% convertible notes due 2028 | Convertible Note              
Subsequent Event [Line Items]              
Stated interest rate (as a percent)   1.75%          
Conversion price (in USD per share) | $ / shares   $ 128.66          
Subsequent Event | 1.75% convertible notes due 2028 | Minimum              
Subsequent Event [Line Items]              
Threshold trading days | day   20          
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