Financial Performance - Interest expense increased to $4.2 million from $2.2 million, attributed to higher interest rates [1] - The company reported a net loss of $6.4 million, or $0.19 per diluted share, compared to a net loss of $35.0 million, or $1.04 per diluted share, in the prior-year quarter [1] - Adjusted net loss for the quarter was $6.0 million ($0.18 per diluted share), compared to $5.1 million ($0.15 per diluted share) in the year-ago quarter [1] Revenue and Profitability - Consolidated fourth-quarter revenue was $154.8 million, down from $163.3 million in the prior-year period, primarily due to softer customer demand in Global Seating and Trim Systems and Components segments [3] - Adjusted EBITDA increased to $2.3 million from $0.9 million a year earlier, with adjusted EBITDA margin rising to 1.5% from 0.6% [2] - For full-year 2025, consolidated revenue was $649.0 million, down from $723.4 million in 2024, driven by lower demand [6] Cash Flow and Debt Management - The company generated $33.7 million of free cash flow for the full year, up $21.5 million from 2024, attributed to improved working capital performance and lower capital expenditures [7] - Free cash flow enabled the company to reduce net debt by $35.8 million during the year, lowering the net leverage ratio to 4.1x trailing twelve-month adjusted EBITDA from 4.7x at the end of 2024 [8] Segment Performance - Global Seating fourth-quarter revenue was $70.7 million, down 5.6% year over year, but adjusted operating income improved to $1.8 million [9] - Global Electrical Systems fourth-quarter revenue increased 12.7% to $49.7 million, benefiting from previously awarded business wins [15] - Trim Systems and Components fourth-quarter revenue declined 22.5% to $34.4 million, reflecting lower demand tied to reduced North American Class 8 production volumes [15] Future Outlook - The company issued 2026 guidance of $660 million to $700 million in sales and $24 million to $30 million in adjusted EBITDA, driven by expected growth in Global Electrical Systems [5][16] - Management expects growth to be supported by strength in Global Electrical Systems, targeting over 10% growth in 2026 [14] - The 2026 outlook assumes improving conditions in end markets and continued ramp of new business, with a forecast for Class 8 heavy truck builds implying a 4% year-over-year increase [13]

Core Viewpoint - Patrick Industries, Inc. has completed the acquisitions of Quality Engineered Services (QES) and Egis Group, LLC, enhancing its capabilities in the marine and RV industries [1][3]. Group 1: Acquisitions - The acquisitions of QES and Egis are aimed at expanding Patrick's offerings in engineered electrical components and system-level solutions for marine and specialty vehicle applications [1][3]. - QES manufactures wire harnesses and electrical systems, while Egis develops engineered electrical components such as terminal blocks and circuit breakers [1][2]. Group 2: Financial Impact - The combined revenue for QES and Egis for the trailing 12 months through November 2025 was approximately $39 million [2]. Group 3: Strategic Goals - The acquisitions align with Patrick's long-term strategy to provide innovative component solutions for OEMs in the Outdoor Enthusiast space and the aftermarket [3]. - QES's strategic location near major pontoon and RV OEMs and Egis's engineering talent will enhance Patrick's service offerings and operational capabilities [3]. Group 4: Company Overview - Patrick Industries is a leading component solutions provider serving the RV, Marine, Powersports, and Housing markets, with a commitment to quality and customer service [4]. - The company employs approximately 10,000 skilled team members across the United States and operates more than 85 leading brands [4].

Financial Data and Key Metrics Changes - The company reported $6 billion in revenue for Q2 2025, with core operating earnings of $292 million and an operating margin of 4.8% [5][25] - Adjusted earnings per share were $3.47, slightly down from $3.60 a year ago, while operating cash flow increased to $296 million from $291 million [5][26] - Full-year net performance outlook was increased by approximately $25 million to over $150 million, reflecting strong operating performance [7][39] Business Line Data and Key Metrics Changes - In the Seating segment, sales were $4.5 billion, a 1% increase year-over-year, while adjusted earnings were $299 million, down 1% [26] - The E Systems segment saw sales of $1.6 billion, also down 1% year-over-year, with adjusted earnings of $76 million, reflecting a decline in operating margins [27][28] - The company won multiple awards in both segments, including significant contracts with major automakers like BMW and Ford [9][10][11] Market Data and Key Metrics Changes - Global vehicle production increased by 3% year-over-year, but was flat on a Lear sales-weighted basis, with North American production down 3% and European production down 2% [23] - Production volumes in China increased by 9%, indicating a shift in market dynamics [23] Company Strategy and Development Direction - The company aims to extend its leadership in Seating, expand margins in E Systems, and enhance operational excellence through automation and restructuring [6][12] - Investments in digital tools and partnerships, such as with Palantir, are expected to drive efficiency gains and improve operational capabilities [8][16] - The focus remains on high-quality programs that generate strong risk-adjusted returns, particularly in the context of ongoing macroeconomic uncertainties [12][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business despite macro uncertainties, reinstating full-year guidance based on strong performance [7][39] - The company is cautious about customer production schedules, embedding a 2% discount in their outlook due to potential headwinds from tariffs and model changeovers [73][74] - Future cash flow expectations are impacted by tariff recovery timing and restructuring investments, with a focus on improving operational efficiency [93][94] Other Important Information - The company has successfully refinanced its $2 billion revolver, extending its maturity and strengthening its liquidity position [40][41] - The company plans to repurchase $250 million worth of stock for the full year, reflecting a commitment to returning excess cash to shareholders [42] Q&A Session Summary Question: Outlook on margin deceleration in the second half - Management acknowledged that the majority of margin deceleration is due to weaker volumes, but emphasized confidence in generating margin expansion through efficiency programs [46][47] Question: Details on awards from Ford - The component business won is for the next generation F-150 and F-250, with ongoing quoting processes for just-in-time business [54][67] Question: Clarification on performance metrics - Management confirmed that the increase in restructuring savings is primarily expected in the second half, with a strong performance anticipated in both segments [62][63] Question: Volume and sales outlook - The company noted a cautious approach to customer production schedules, reflecting uncertainty in the market and adjustments based on model changeovers [72][73] Question: Revenue from conquest award with EV OEM - The conquest award is expected to generate about $50 million in additional revenue starting late this year, with full effects seen in 2026 and 2027 [78][79]