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ACQUISITIONS
 9 Months Ended
Sep. 28, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, 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 product offerings, expand into additional markets, and gain key technologies. 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 2025 and three acquisitions in the first nine months of 2025 (the "2025 Acquisitions"). Acquisition-related costs associated with the 2025 Acquisitions were immaterial. For the third quarter and nine months ended September 28, 2025, net sales included in the Company's condensed consolidated statements of income related to the 2025 Acquisitions were $11.0 million and $24.2 million, respectively, and operating income was $0.1 million and operating losses were $0.3 million, respectively. 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 one acquisition in the third quarter of 2024 and seven acquisitions in the first nine months of 2024. Acquisition-related costs associated with the acquisitions completed in the first nine months of 2024 were approximately $5.0 million. 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 acquisitions completed in the first nine months of 2024 were $78.6 million and $216.4 million, respectively, and operating income was $12.3 million and $38.9 million, respectively.
In connection with certain acquisitions, the Company is required to pay additional cash consideration if certain financial results of the acquired businesses are achieved. The Company records a liability for the estimated fair value of the contingent consideration related to each of these acquisitions as part of the initial purchase price based on the present value of the expected future cash flows and the probability of future payments at the date of acquisition.
Changes in the contingent consideration liability for the third quarter and nine months ended September 28, 2025 and September 29, 2024 are as follows:
Third Quarter Ended
Nine Months Ended
($ in thousands)September 28, 2025September 29, 2024September 28, 2025September 29, 2024
Fair value at beginning of period$3,776 $1,800 $3,608 $8,510 
Additions500 3,001 2,300 3,131 
Fair value adjustments(1,098)— (2,698)(1,900)
Settlements(16)(36)(48)(4,976)
Fair value at end of period$3,162 $4,765 $3,162 $4,765 
The following table shows the balance sheet location of the fair value of contingent consideration and the maximum amount of contingent consideration payments the Company may be subject to:
($ in thousands)September 28, 2025December 31, 2024
Accrued liabilities$800 $1,665 
Other long-term liabilities2,362 1,943 
Total fair value of contingent consideration$3,162 $3,608 
Maximum amount of contingent consideration$7,360 $8,618 
2025 Acquisitions
The Company completed three acquisitions in the first nine months ended September 28, 2025. Total cash consideration for the 2025 Acquisitions was approximately $66.0 million, plus a working capital holdback and contingent consideration over a two-year period based on future performance in connection with two acquisitions. As the Company finalizes the fair value of the acquired assets and assumed liabilities, additional purchase price adjustments may be recorded during the measurement period. Changes to preliminary purchase accounting estimates recorded in the third quarter and nine months ended September 28, 2025 related to the 2025 Acquisitions were immaterial.
2024 Acquisitions
The Company completed seven acquisitions in the year ended December 31, 2024, including the following previously announced acquisitions (collectively, the “2024 Acquisitions”):
CompanySegmentDescription
Sportech, LLC ("Sportech")ManufacturingLeading 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, doing business as RecPro ("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 $416.1 million, plus contingent consideration over a three-year period based on future performance in connection with certain acquisitions. Purchase price allocations and all valuation activities in connection with the 2024 Acquisitions have been finalized. Changes to preliminary purchase accounting estimates recorded in the third quarter and nine months ended September 28, 2025 related to the 2024 Acquisitions were immaterial.
The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of each of the 2025 Acquisitions and 2024 Acquisitions:
2025
Acquisitions		2024
Acquisitions
($ in thousands)TotalSportechAll OthersTotal
Consideration:
Cash, net of cash acquired$66,012 $319,073 $96,998 $416,071 
Working capital holdback and other, net481 — — — 
Contingent consideration (1)
1,202 — 2,030 2,030 
Total consideration$67,695 $319,073 $99,028 $418,101 
Assets Acquired:
Trade receivables$3,896 $21,587 $2,256 $23,843 
Inventories10,317 20,611 19,011 39,622 
Prepaid expenses & other349 1,719 3,495 5,214 
Property, plant & equipment24,967 18,766 6,997 25,763 
Operating lease right-of-use assets— 15,096 1,283 16,379 
Identifiable intangible assets:
Customer relationships12,390 152,000 17,560 169,560 
Non-compete agreements1,100 2,000 2,375 4,375 
Patents and developed technology4,330 17,500 600 18,100 
Trademarks2,250 20,500 8,000 28,500 
Liabilities Assumed:
Current portion of operating lease obligations— (1,437)(586)(2,023)
Accounts payable & accrued liabilities(8,600)(32,398)(4,312)(36,710)
Operating lease obligations— (13,658)(699)(14,357)
Deferred tax liabilities— (21,288)— (21,288)
Total fair value of net assets acquired50,999 200,998 55,980 256,978 
Goodwill (2)
16,696 118,075 43,048 161,123 
Total purchase price allocation$67,695 $319,073 $99,028 $418,101 
(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 the 2025 Acquisitions and 2024 Acquisitions, except for Sportech which is only partially tax-deductible.
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 average estimated useful life for non-compete agreements is 5 years. The estimated useful life for patents is 13 years, individually ranging from 10 to 18 years. Trademarks have an indefinite useful life.
Pro Forma Information (Unaudited)
The following pro forma information for the third quarter and nine months ended September 28, 2025 and September 29, 2024 assumes the 2025 Acquisitions and 2024 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 2025 Acquisitions and 2024 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 $0.1 million and $0.6 million for the third quarter and nine months ended September 28, 2025, respectively, and $0.6 million and $3.2 million for the third quarter and nine months ended September 29, 2024, respectively.
 
Third Quarter Ended
Nine Months Ended
($ in thousands, except per share data)September 28, 2025September 29, 2024September 28, 2025September 29, 2024
Revenue$978,191 $944,823 $3,041,645 $2,984,213 
Net income$35,941 $41,031 $107,714 $125,789 
Basic earnings per common share$1.11 $1.26 $3.31 $3.86 
Diluted earnings per common share$1.02 $1.21 $3.13 $3.76 
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.