Patrick Industries Operating Margin Falls to 5.1%

The Tip Desk · October 31, 2026 · 3 min read

Net sales were $975 million in the third quarter as RV revenue fell 15% and merger-related costs cut reported profit.

Patrick Industries, Inc. (PATK), a component solutions provider for outdoor-enthusiast and housing manufacturers, reported third-quarter net sales of $975 million, essentially unchanged from $976 million a year earlier.

Growth in Marine, Powersports and Housing nearly offset a 15% drop in RV revenue, the company said, after RV industry wholesale unit shipments fell 13%. Chief Executive Officer Andy Nemeth said the mix kept consolidated sales in line with the prior year.

Operating income was $50 million and operating margin was 5.1%, compared with $66 million and 6.8% a year earlier. Adjusted operating margin, which excludes merger-related expenses, restructuring costs and other non-recurring items, was 6.8%, unchanged from the year-ago period. Net income was $21 million, or $0.64 a share, versus $35 million, or $1.01 a share. Adjusted net income was $34 million, or $1.03 a share, versus $35 million, or $1.01 a share. Reported and adjusted diluted EPS included about $0.03 of dilution from convertible notes and related warrants, compared with $0.07 a year earlier. Adjusted EBITDA rose 3% to $116 million and adjusted EBITDA margin expanded 40 basis points to 11.9%.

RV, 37% of revenue, generated $362 million. Trailing-twelve-month content per wholesale RV unit rose 4% to $5,263 versus the year-ago period and fell 1% versus the second quarter of 2026. President Jeff Rodino said RV OEMs and dealers remained disciplined in managing field inventory in response to lower retail demand.

Marine, 18% of revenue, generated $171 million, outperforming an estimated 8% rise in wholesale powerboat industry unit shipments. Trailing-twelve-month estimated content per wholesale powerboat unit increased 20% to $4,942 versus the year-ago period and 1% versus the second quarter. The company said Marine growth reflected higher estimated content per unit and stronger estimated powerboat shipments. Powersports, 13% of revenue, generated $128 million on higher Sportech cab-enclosure attachment rates, other premium features and continued demand for utility-focused units. Housing, 32% of revenue, generated $314 million as estimated wholesale manufactured-housing unit shipments rose 2% and total housing starts fell 4%. Trailing-twelve-month estimated content per wholesale MH unit decreased 2% to $6,565 versus the year-ago period and 1% versus the second quarter.

The company launched Patrick Printing Solutions, a direct-to-panel printing platform for composite, wood and other substrates.

For the first nine months of 2026, cash provided by operating activities was $147 million compared with $199 million in the prior-year period, which the company said reflected working-capital deployment for composite products and proactive inventory management. Trailing-twelve-month free cash flow through the third quarter was $203 million. Purchases of property, plant and equipment totaled $19 million in the third quarter.

Patrick returned $15 million through regular quarterly dividends and did not repurchase shares during the quarter because of restrictions related to its merger agreement with LCI Industries; unused repurchase capacity was $62 million. Total debt was approximately $1.4 billion, for a total net leverage ratio of 2.9x, and available liquidity was approximately $716 million at quarter-end.

On June 30, 2026, the company signed a definitive agreement with LCI Industries to combine in an all-stock merger. The Form S-4 was declared effective October 19, 2026, and a special shareholder meeting is set for November 18, 2026. Nemeth said the company remains focused on the value-added opportunity related to the pending merger as it shifts focus to 2027.