Patrick Industries (PATK) risk factors, FY2025 10-K

Risks Related to our Business

1. 01Economic and business conditions beyond Patrick's control, including cyclicality and seasonality in the industries it sells products, could lead to fluctuations in and negatively impact operating results
2. 02If the financial condition of our customers and suppliers deteriorates, our business and operating results could suffer
3. 03Our sales are materially concentrated with two customers, the loss of either of which could have a material adverse impact on our operating results and financial condition
4. 04A material percentage of the Company’s sales are concentrated in the RV industry, and declines in the level of RV unit shipments or reductions in industry growth could reduce demand for our products and adversely impact our operating results and financial condition28% rewritten
5. 05Conditions in the credit market could limit the ability of consumers, dealers and wholesale customers to obtain retail, floor plan and wholesale financing for RVs, marine products, powersports products, and manufactured homes, resulting in reduced demand for our products
6. 06The RV, marine, powersports, MH and industrial industries are highly competitive and some of our competitors may have greater resources than we do56% rewritten
7. 07Our operating results can be adversely affected by inflation, changes in the cost or availability of raw materials, energy, transportation and other necessary supplies and services
8. 08If we cannot effectively manage the challenges and risks associated with doing business internationally, our revenues and profitability may suffer
9. 09Our business is subject to risks associated with importing products, and the imposition of additional duties, tariffs or trade restrictions could have a material adverse effect on our business, results of operations, financial condition, and cash flows27% rewritten
10. 10If we are unable to manage our inventory, our operating results could be materially and adversely affected
11. 11Increases in demand for our products could make it more difficult for us to obtain additional skilled labor, which may adversely impact our operating efficiencies
12. 12Fuel shortages or high prices for fuel could have an adverse impact on our operations
13. 13Interruptions or disruptions in production at one of our key facilities could have a material adverse impact on our operations
14. 14Our ability to integrate acquired businesses may adversely affect operations
15. 15We may incur material charges or be adversely impacted by the consolidation and/or closure of all or part of a manufacturing or distribution facility
16. 16We could incur charges for impairment of assets, including goodwill and other long-lived assets, due to potential declines in the fair value of those assets or a decline in expected profitability of the Company or individual reporting units of the Company
17. 17The inability to attract and retain qualified executive officers and key personnel may adversely affect our operations
18. 18We could be impacted by potential effects of union organizing activities
19. 19We are subject to federal, state, local and certain international tax regulation. Changes thereto can have impacts on taxes paid, exposure to liabilities, and financial results of the Company
20. 20We could experience unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, services, perceived environmental impacts, or otherwise
21. 21Public health emergencies, whether domestic or international, may have an adverse effect on our business, results of operations, financial position and cash flows

Risks Related to Indebtedness

1. 22Our level and terms of indebtedness could adversely affect our ability to raise additional capital to fund our operations and take advantage of new business opportunities and prevent us from meeting our obligations under our debt instruments
2. 23The agreements governing our indebtedness contain various financial performance and other covenants. If we do not remain in compliance with these covenants, we could be in breach of our debt agreements and the amounts outstanding thereunder could become immediately due and payable
3. 24Due to industry conditions and our operating results, there have been times in the past when we have had limited access to sources of capital. If we are unable to locate suitable sources of capital when needed, we may be unable to maintain or expand our business
4. 25The conditional conversion feature of the 1.75% Convertible Notes due 2028 may adversely affect our financial condition and operating results22% rewritten
5. 26The convertible note hedge and warrant transactions may affect the value of the 1.75% Convertible Notes and our common stock

Risks Related to Information Security, Cybersecurity and Data Privacy

1. 27If our information technology systems fail to perform adequately, our operations could be disrupted which could adversely affect our business, reputation and results of operations
2. 28A cyber incident or data breach could result in information theft, data corruption, operational disruption, and/or financial loss

Other Risks

1. 29Certain provisions in our Articles of Incorporation and Amended and Restated By-laws may delay, defer or prevent a change in control that our shareholders might consider to be in their best interest
2. 30Conditions within the insurance markets could impact our ability to negotiate favorable terms and conditions for various liability coverage and could potentially result in uninsured losses

Risks Related to Ownership of our Common Stock

1. 31A variety of factors, many of which are beyond our control, could influence fluctuations in the market price for our common stock