Patrick Industries, Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Delivered solid third quarter performance with net sales increasing 6% to $976 million, driven by diversified business model, solid organic growth, and innovation.
• Strong balance sheet with total net liquidity of $779 million.
• Continued investments in aftermarket, new product development, digital tools, data analytics, and AI-powered solutions.
• Strategic initiatives including acquisitions of LilliPad Marine, Medallion Instrumentation Systems, and Elkhart Composites, and process modernization.
• Progress in expanding content per unit (CPU) through innovation, collaboration, and targeted investment across end markets.
• Marine brands had a successful showing at IBEX, and Rockford Fosgate launched a new 2024+ HD aftermarket solution at Sturgis.

Segment Performance

• RV: Net sales increased 7% to $426 million, representing 44% of consolidated revenue. Content per unit (CPU) on a trailing 12-month basis was $5,055, up 3% year-over-year, and up 8% sequentially in the third quarter compared to the second quarter of 2025.
• Marine: Net sales increased 11% to $150 million, outperforming flat wholesale powerboat unit shipments. CPU on a trailing 12-month basis was $4,091, up 4% year-over-year, and up 15% sequentially in the third quarter compared to the second quarter of 2025. The company acquired LilliPad Marine during the quarter.
• Powersports: Net sales increased 12% to $98 million, representing 10% of third quarter 2025 consolidated sales. Revenues improved across all Powersports businesses, with growth in attachment rates for Sportech's products.
• Housing: Net sales were up 1% to $302 million, representing 31% of consolidated sales. Manufactured Housing, which made up approximately 58% of Housing revenue, had an estimated CPU on a trailing 12-month basis up 2% year-over-year to $6,682. MH wholesale unit shipments and total Housing starts both decreased 2% in the quarter.

Guidance

• Third quarter 2025 net sales increased 6% to $976 million, with earnings per diluted share $1.01.
• 2025 adjusted operating margin expected to be approximately 7%.
• 2026 outlook: RV wholesale shipments expected to increase low- to mid-single digits, Marine retail shipments down high single digits, Powersports wholesale shipments down high single digits but organic content up high single digits, MH wholesale unit shipments up low- to mid-single digits, Housing starts flat to up 5%.
• Operating margin expected to improve 70 to 90 basis points in 2026.

Risks

• Tariff impacts and dynamic supply chain landscape, with teams actively working to minimize potential impact.
• Inventory management challenges, including dealer inventory levels and OEM production ramping.