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 27, 2026 and December 31, 2025, its results of operations for the three and nine months ended September 27, 2026 and September 28, 2025, and its cash flows for the nine months ended September 27, 2026 and September 28, 2025.

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, 2025, filed with the SEC on February 19, 2026.

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 2026 ended on September 27, 2026, and the third quarter of fiscal year 2025 ended on September 28, 2025.

Earnings Per Common Share

Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per common share is computed by dividing net income available for diluted shares by the weighted-average number of common shares outstanding, plus the weighted-average impact of potentially dilutive convertible notes and warrants, plus the dilutive effect of stock options, stock appreciation rights ("SARs"), and certain restricted stock awards (collectively, “Common Stock Equivalents”). The dilutive effect of Common Stock Equivalents is calculated under the treasury stock method using the average market price for the period. Common Stock Equivalents are not included in the computation of diluted earnings per common share if their effect would be anti-dilutive.

Other expenses

During the nine months ended September 28, 2025, the Company recognized a legal settlement expense of $24.4 million, related to a motor vehicle accident that resulted in two fatalities, within "Other expenses" in the Company's condensed consolidated statements of income.

Merger Agreement with LCI Industries

On June 30, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with LCI Industries (“LCI”), Planet First Merger Sub Inc., a wholly owned subsidiary of the Company, and Planet Second Merger Sub LLC, a wholly owned subsidiary of the Company. The boards of directors of both the Company and LCI unanimously approved the Merger Agreement and the transactions contemplated thereby.

Under the Merger Agreement, and subject to the satisfaction or waiver of customary closing conditions, LCI will merge with a subsidiary of the Company and ultimately become a wholly owned subsidiary of the Company. At the effective time of the merger, each issued and outstanding share of LCI common stock, par value $0.01 per share, other than certain excluded shares, will be converted into the right to receive 1.2440 shares of the Company’s common stock, no par value, plus cash in lieu of fractional shares. Following completion of the transaction, existing Company shareholders are expected to own approximately 52% of the combined company, and existing LCI shareholders are expected to own approximately 48%. The Merger Agreement also restricts the Company from repurchasing its common stock prior to the closing of the transaction.

The transaction is subject to customary closing conditions, including shareholder approvals by both companies, receipt of required regulatory approvals, and Nasdaq approval of the listing of the shares to be issued. The registration statement on Form S-4 was declared effective by the SEC on October 19, 2026. The transaction is expected to close in the first half of 2027. The Merger Agreement contains customary termination rights and provides for a termination fee of $94.2 million payable by either party under specified circumstances.

During the three and nine months ended September 27, 2026, the Company incurred merger-related costs of $14.7 million and $15.1 million, respectively, included in “Selling, general and administrative” expenses in the Company’s condensed consolidated statements of income. The merger remained pending as of the issuance date of these unaudited condensed consolidated 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, 2025, filed with the SEC on February 19, 2026.

Major Customer Concentration

The Company had two major customers that accounted for the following consolidated net sales for the three and nine months ended September 27, 2026 and September 28, 2025:

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 either assessed and determined to be not applicable or are expected to have an immaterial impact on the Company’s unaudited condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

Accounting Standards Not Yet Adopted

In September 2025, the FASB issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software". This update eliminates the previous stage-based capitalization model for internal-use software projects and instead requires capitalization once management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. The update permits an entity to apply the new guidance using a prospective transition approach, modified transition approach or a retrospective transition approach. This ASU is effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of ASU 2025-06 will have on the Company's consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses". The amendments in this update require public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items in the notes to the financial statements. Public business entities are required to apply the guidance prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of ASU 2024-03 will have on the Company's consolidated financial statements.

In January 2025, the FASB issued ASU 2025-01, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date". This update revises the effective date of ASU 2024-03 to clarify that the guidance is to be adopted by all public entities for annual reporting periods beginning after December 15, 2026 and for interim periods within annual reporting periods beginning after December 15, 2027. The intent of this update is to prevent non-calendar year-end entities from concluding that the initial adoption is required to be in an interim reporting period, rather than an annual reporting period.

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:

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:

NOTE 4. GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the nine months ended September 27, 2026 by segment are as follows:

Intangible assets, net consisted of the following as of September 27, 2026 and December 31, 2025:

Changes in the carrying value of intangible assets by segment are as follows:

NOTE 5. 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 three acquisitions during the nine months ended September 27, 2026 (the "2026 Acquisitions"), includingone acquisition during the three months ended September 27, 2026. Acquisition-related costs associated with the 2026 Acquisitions were immaterial. Net sales included in the Company's condensed consolidated statements of income related to the 2026 Acquisitions were $2.6 million and $4.4 million for the three and nine months ended September 27, 2026, respectively, and operating income was $0.7 million and $1.0 million for the three and nine months ended September 27, 2026, 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 completedone acquisition during the three months ended September 28, 2025 andthree acquisitions during the nine months ended September 28, 2025. Acquisition-related costs associated with such acquisitions were immaterial. For the three and nine months ended September 28, 2025, net sales included in the Company's condensed consolidated statements of income related to the acquisitions completed in the nine months ended September 28, 2025 were $11.0 million and $24.2 million, respectively, and operating income was $0.1 million and operating losses were $0.3 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 are as follows:

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:

2026 Acquisitions

The Company completed three acquisitions during the nine months ended September 27, 2026. Total cash consideration for the 2026 Acquisitions was approximately $22.2 million, plus contingent consideration over atwo-year period based on future performance in connection with one acquisition and a working capital holdback 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 during the three and nine months ended September 27, 2026 related to the 2026 Acquisitions were immaterial.

2025 Acquisitions

The Company completed five acquisitions during the year ended December 31, 2025 (the "2025 Acquisitions"). Total cash consideration for the 2025 Acquisitions was approximately $118.4 million, plus contingent consideration over a less thantwo-year period based on future performance in connection with certain acquisitions. Purchase price allocations and all valuation activities in connection with three of the 2025 Acquisitions have been finalized. Changes to preliminary purchase accounting estimates recorded during the three and nine months ended September 27, 2026 related to the 2025 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 2026 Acquisitions and 2025 Acquisitions:

(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 2026 Acquisitions and 2025 Acquisitions.

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 three and nine months ended September 27, 2026 and September 28, 2025 assumes the 2026 Acquisitions and 2025 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 2026 Acquisitions and 2025 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 $0.2 million and $0.7 million for the three and nine months ended September 27, 2026, respectively, and $0.7 million and $1.8 million for the three and nine months ended September 28, 2025, respectively.

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.

NOTE 6. STOCK-BASED COMPENSATION

The Company recorded stock-based compensation expense, net of forfeitures, of approximately $5.9 million and $17.9 million in the three and nine months ended September 27, 2026, respectively, and $3.9 million and $15.2 million in the three and nine months ended September 28, 2025, respectively.

The Board approved various share grants under the Company’s 2009 Omnibus Incentive Plan for the nine months ended September 27, 2026 totaling 184,985 shares in the aggregate at an average fair value of $127.31 per share at grant date for a total fair value at grant date of $23.5 million.

Stock Appreciation Rights ("SARs"):

On February 25, 2025, the Board approved the grant of 329,850 SARs divided into four tranches at exercise prices of $92.72, $110.76, $132.31 and $158.05 per share. The SARs vest pro-ratably over four years from the grant date and have nine-year contractual terms. The SARs are to be settled in shares of common stock or, at the sole discretion of the Board, in cash. As of September 27, 2026, the total remaining unrecognized cost was $3.2 million which will be expensed ratably over thefour-year vesting period.

Stock Options:

On February 25, 2025, the Board approved the grant of 329,850 stock options at an exercise price per share of $92.72. The stock options vest pro-ratably over four years from the grant date and have nine-year contractual terms. As of September 27, 2026, the total remaining unrecognized cost was $4.5 million which will be expensed ratably over thefour-year vesting period.

The Company estimates the fair value of the stock options and SARs awards as of the grant date by applying the Black-Scholes option-pricing model. The following are the assumptions that were used in calculating the fair value of stock options and SARs granted in February 2025:

NOTE 7. EARNINGS PER COMMON SHARE

Earnings per common share are as follows:

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.

NOTE 8. DEBT

A summary of total debt outstanding is as follows:

As of September 27, 2026, the Company maintained a senior secured credit facility comprised of a $875 million revolving credit facility (the "Revolver due 2029") and a $125 million term loan (the "Term Loan due 2029") and together with the Revolver due 2029, (the "2024 Credit Facility").

The interest rate for incremental borrowings under the Revolver due 2029 as of September 27, 2026 was the Secured Overnight Financing Rate (“SOFR”) plus 1.75% (or 5.65%) for the SOFR-based option. The fee payable on committed but unused portions of the Revolver due 2029 was 0.225% as of September 27, 2026.

Total cash interest paid was $4.8 million and $38.1 million for the three and nine months ended September 27, 2026, respectively, and $4.0 million and $38.6 million for the three and nine months ended September 28, 2025, respectively.

Conditional Conversion Feature of the 1.75% Convertible Senior Notes due 2028

The 1.75% Convertible Senior Notes due 2028 (the “1.75% Convertible Notes”) have a conditional conversion feature related to the price of our common stock equaling or exceeding 130% of the conversion price during a specified in the prior calendar quarter. This condition was satisfied during the calendar quarter ended June 30, 2026 and, as a result, the 1.75% Convertible Notes were convertible, in whole or in part, at the option of the holders from July 1, 2026 to September 30, 2026.

This condition was not satisfied during the calendar quarter ended September 30, 2026 and, as a result, the notes are not convertible from October 1, 2026 to December 31, 2026. Whether the 1.75% Convertible Notes will be convertible in subsequent periods will depend on the satisfaction of this condition or another conversion condition in the future. There were no conversions of the 1.75% Convertible Notes during the nine months ended September 27, 2026.

NOTE 9. FAIR VALUE MEASUREMENTS

The following table presents fair values of certain assets and liabilities as of September 27, 2026 and December 31, 2025:

(1)The amounts of these notes listed above are the fair values for disclosure purposes only, and they are recorded in the Company's condensed consolidated balance sheets as of September 27, 2026 and December 31, 2025 at carrying value.

(2)The carrying amounts of our term loan and revolving credit facility approximate fair value as of September 27, 2026 and December 31, 2025 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".

NOTE 10. INCOME TAXES

The effective tax rate was 32.1% and 26.2% for the three months ended September 27, 2026 and September 28, 2025, respectively, and the effective tax rate for the comparable nine month periods was 23.2% and 23.1%, respectively. For the three and nine months ended September 27, 2026, effective tax rates include the impact of the recognition of excess tax benefits on share-based compensation that reduced income tax expense by animmaterial amount and $5.6 million, respectively. For the three and nine months ended September 28, 2025, the impact of such excess tax benefits wasimmaterial and $3.4 million, respectively.

Cash paid for income taxes, net of refunds, was $2.1 million and $5.2 million for the three and nine months ended September 27, 2026, respectively, and $1.1 million and $23.4 million for the three and nine months ended September 28, 2025, respectively.

NOTE 11. SEGMENT INFORMATION

The Company hastwo reportable segments, Manufacturing and Distribution, which are defined based on the way in which internally reported information is regularly reviewed and evaluated by the Company’s chief operating decision maker (the "CODM"), who is our Chairman and Chief Executive Officer, to allocate resources, evaluate financial results and make decisions. The Company does not measure profitability at the end market (RV, marine, powersports, MH and industrial) level.

Manufacturing – This segment includes the following products: laminated products utilized to produce furniture, shelving, walls and countertops; laminated and decorative surface products, including laminated panels, decorative and wrapped vinyls, paper-laminated panels, and vinyl printing; solid surface, granite and quartz countertops; fabricated aluminum products; hardwood profile mouldings; electrical systems components including instrument, digital switching, dash panels, digital displays and gauges; slide-out trim and fascia; cabinet products, doors, components and custom cabinetry; tooling for fiberglass boat manufacturers; fiberglass bath fixtures and tile systems; specialty bath and closet building products; boat towers, tops, power bimini systems, trailers, frames and other engineered structural components; softwoods lumber; interior passage doors and baggage doors; wiring and wire harnesses; CNC molds and composite parts; aluminum and plastic fuel tanks; slotwall panels and components; RV painting; thermoformed shower surrounds; fiberglass and plastic components including front and rear caps and marine helms; polymer-based and other flooring; Marine hardware and accessories; air handling products; treated, untreated and laminated plywood; RV and marine furniture; adhesives and sealants; audio systems and accessories, including amplifiers, tower speakers, soundbars, and subwoofers; Marine non-slip foam flooring, padding, and accessories; protective covers for boats, RVs, aircraft, and military and industrial equipment; windshield and wiper systems; roofs/canopies; integrated door systems; fender flares and rear panels; composite panels; and other products.

Distribution – The Company distributes pre-finished wall and ceiling panels; drywall and drywall finishing products; interior and exterior lighting products; wiring, electrical and plumbing products; transportation and logistics services; electronics and audio systems components; cement siding; raw and processed lumber; fiber reinforced polyester (“FRP”) products; interior passage doors; roofing products; laminate and ceramic flooring; shower doors; fireplaces and surrounds; appliances; tile; Marine hardware and accessories; RV awnings, windows, fiberglass siding and roofing; Marine windshields; RV air conditioning units and furniture; and other products in addition to providing transportation and logistics services.

The CODM evaluates the performance of the Company's segments and allocates resources to them based on a variety of indicators including but not limited to net sales, gross profit and operating income. On at least a quarterly basis, the CODM considers actual to budget variances as well as actual to prior year actual performance for both profit measures when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses segment gross profit and segment operating income to assess the performance of each segment by comparing the results of each segment with one another.

The accounting policies of the segments are the same as those described in Note 1 "Basis of Presentation and Significant Accounting Policies" included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026. Segment net sales data includes inter-segment sales. The Company accounts for inter-segment sales similar to third party transactions, which reflect current market prices. Certain income from purchase incentive agreements is not allocated to the segments and instead recorded at the corporate level. Assets are identified to the segments except for cash, prepaid expenses, land and buildings, and certain deferred assets, which are identified with corporate. Corporate charges rent to the segments for use of the land and buildings based upon estimated market rates.

The following tables summarize key financial information by segment:

A reconciliation of certain line items pertaining to the total reportable segments to the condensed consolidated financial statements for the three and nine months ended September 27, 2026 and September 28, 2025, and as of September 27, 2026 and December 31, 2025 is as follows:

The Company's revenue from external customers and long-lived assets are substantially all attributed to the U.S.

NOTE 12. STOCK REPURCHASE PROGRAMS

In November 2024, 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 $200 million, including the $72.9 million remaining under the previous authorization. As of September 27, 2026, Patrick had approximately $61.9 million remaining in the amount of the Company's common stock that may be acquired under the current stock repurchase program.

Under the stock repurchase plan, the Company made repurchases of common stock as follows for the respective periods:

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, 2025, 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, 2025, filed with the SEC on February 19, 2026. 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.

On or about May 1, 2026, three current employees filed a putative class action lawsuit against the Company in the U.S. District Court for the Northern District of Indiana, captioned Wilds, et al. v. Patrick Industries, Inc., Case No. 3:26-cv-00582. The plaintiffs brought the action individually and on behalf of a proposed class of participants and beneficiaries in the Company’s employee benefit plans.

The complaint alleges that the Company imposed tobacco-related surcharges through a wellness program that did not comply with the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Public Health Service Act, and related regulations. The plaintiffs allege, among other claims, that the Company failed to provide a reasonable alternative standard, provided insufficient notices and disclosures, and breached certain fiduciary duties under ERISA.

The litigation is in its early stages. At this time, the Company is unable to predict the outcome of the matter or reasonably estimate the amount or range of any potential loss. Accordingly, the Company has not recorded a liability related to this matter.

NOTE 14. RESTRUCTURING

The Company undertakes restructuring activities as necessary to streamline operations, improve efficiency and reduce costs in response to business needs and industry conditions. These activities generally relate to the realignment of existing operations and resources to support the Company’s strategic objectives. Related charges are recorded within “Selling, general and administrative” expenses in the Company’s condensed consolidated statements of income.

In the third quarter of 2026, the Company initiated a restructuring program affecting the Manufacturing segment. The program is primarily focused on aligning our manufacturing footprint and workforce with demand and consolidating underutilized operations while preserving capacity to support customers and future growth. The Company expects the program to be substantially complete by the second quarter of 2027.

Total program costs are expected to be approximately $4.5 million. During each of the three and nine months ended September 27, 2026, the Company recorded restructuring charges totaling $2.0 million, consisting of $0.8 million of costs relating to employee termination benefits and $1.2 million of contract termination and other costs. These amounts represent cumulative charges incurred since the program’s inception. The remaining expected charges of approximately $2.5 million are expected to be incurred through the second quarter of 2027.

The Company made cash payments related to the restructuring program of approximately $0.8 million during the nine months ended September 27, 2026. The remaining restructuring liability of approximately $1.2 million at September 27, 2026 is included in “Accrued liabilities” in the Company’s condensed consolidated balance sheets and is expected to be paid by December 31, 2026.

The restructuring charges of $2.0 million in both the three and nine months ended September 27, 2026, relate to the Manufacturing reportable segment, withno restructuring charges in the comparable 2025 periods.

The table below summarizes the activity in the restructuring liability for the nine months ended September 27, 2026:

NOTE 15. RELATED PARTY TRANSACTIONS

On March 26, 2026, the Company acquired substantially all of the assets of Revel, LLC, d/b/a Red Rock Aluminum Products ("Revel") and Red Rock, LLC ("Red Rock") for total cash consideration of $7 million. Both companies serve the RV end market. Todd Cleveland, a member of the Company's Board of Directors, indirectly held a majority interest in each of Revel and Red Rock; accordingly, the transaction is considered a related party transaction. The purchase price is expected to be allocated primarily to working capital, identifiable intangible assets and goodwill. See Note 5 "Acquisitions" for further details.

Mr. Cleveland recused himself from all Board deliberations and approval of the transaction. The Audit Committee, composed solely of independent directors, reviewed and approved the transaction in accordance with the Company's procedures for evaluating related party transactions.