UFP Industries Inc.
11/05/2025 | Press release | Distributed by Public on 11/05/2025 11:32
Quarterly Report for Quarter Ending September 27, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
UFP Industries, Inc. is a holding company with subsidiaries in North America, Europe, Asia, and Australia that design, manufacture, and supply products made from wood, wood and non-wood composites, and other materials to three segments: retail, packaging, and construction. Our business segments are functionally interdependent and are supported by common corporate services, such as accounting and finance, information technology, human resources, marketing, purchasing, transportation, legal and compliance, among others. We regularly invest in automation and implement best practices to improve the efficiency of our manufacturing facilities across each of the segments. The results and improvements from these investments are shared among the segments. This exchange of ideas drives faster innovation for new products, processes, and product improvements. While the majority of our facilities serve only one business segment, many of our larger facilities serve two or more segments.
We believe that our operating structure allows us to better evaluate market conditions and opportunities and more effectively allocate capital and resources to the appropriate segments and business units. Also, we believe our diversification and manner in which we operate our business provide an inherent hedge against the business cycles our end markets experience and over which we have limited control. Accordingly, we have the ability to provide more stable earnings and cash flows to our shareholders. Our diversification and operating practices also mitigate the impact that more volatile lumber market conditions have on traditional lumber companies. We are headquartered in Grand Rapids, Michigan.
This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management's beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like "anticipates," "believes," "confident," "estimates," "expects," "forecasts," "likely," "plans," "projects," "should," variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. We do not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in currency and inflation; fluctuations in the price of lumber; adverse economic conditions in the markets we serve; changes in tariffs, import/export regulations, and other trade policies; concentration of sales to customers; the success of vertical integration strategies; excess capacity or supply chain challenges; our ability to make successful business acquisitions; government regulations, particularly involving environmental and safety regulations; adverse or unusual weather conditions; inbound and outbound transportation costs; alternatives to replace treated wood products; cybersecurity breaches; and potential pandemics. Certain of these risk factors as well as other risk factors and additional information are included in our reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.
OVERVIEW
Our results for the third quarter of 2025 include the following highlights:
| ● | Our net sales decreased 5% compared to the third quarter of 2024, which was comprised of a 1% decrease in selling prices and a 4% decrease in unit sales. The overall decrease in our selling prices is primarily due to more competitive pricing in our Site Built business unit and lower commodity lumber costs which were passed to customers in our selling prices. Organic unit sales declined due to a 6% decrease in our retail segment, a 2% decrease in our construction segment, and a 3% decrease in our packaging segment. An acquired business contributed a 1% unit increase in our packaging segment. |
UFP INDUSTRIES, INC.
| ● | Our gross profits decreased by $36 million, or 12%, compared to the same period of the prior year. By segment, gross profits decreased by $21 million in Construction, $13 million in Retail, $4 million in Packaging, and $1 million in All Other, partially offset by a $3 million increase in Corporate. The overall decrease in our gross profits is primarily due to weaker demand impacting volumes in our Site-Built, ProWood, and Structural Packaging business units, competitive pricing in our Site Built and PalletOne business units, and cost increases in our Deckorators business unit. |
| ● | Our operating profits decreased $31 million, or 25%, compared to the third quarter of 2024. The overall decrease is a result of the decrease in gross profits mentioned above and an $8 million increase in our net loss from the impairment and disposition of certain assets and other net losses, partially offset by a $13 million decrease in selling, general, and administrative ("SG&A") expenses. The decrease in SG&A is due to our cost reduction efforts and incentive compensation tied to profitability and return on investment totaling $19 million, partially offset by a $6 million increase in advertising costs to build brand awareness of our Deckorators' Surestone composite decking. |
| ● | Our cash flows from operations was $399 million in the first nine months of 2025 compared to $498 million during the first nine months of 2024. The $99 million decline resulted from a decrease in net earnings and non-cash expenses of $79 million and an increase in our investment in net working capital since year end that was $19 million higher in the first nine months of 2025 than it was in 2024. We anticipate that this increase in net working capital will convert to cash by the end of the fourth quarter as we move to the slower seasonal time for our business. |
| ● | Our Cash and cash equivalents at the end of September 2025 was $1.0 billion compared to $1.2 billion at the end of September 2024. The decline in our cash is primarily due to our elevated level of share repurchases this year. Our unused borrowing capacity under our revolving credit facility and a shelf agreement with certain lenders along with our cash resulted in total liquidity of approximately $2.3 billion at the end of the third quarter of 2025. |
HISTORICAL LUMBER PRICES
We experience significant fluctuations in the cost of commodity lumber products from primary producers ("Lumber Market"). The following table presents the Random Lengths framing lumber composite price:
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Random Lengths Composite |
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Average $/MBF |
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||||
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2025 |
2024 |
|||||
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January |
|
$ |
434 |
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$ |
398 |
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February |
|
442 |
|
389 |
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March |
|
479 |
|
416 |
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April |
|
485 |
|
403 |
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||
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May |
|
453 |
|
377 |
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||
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June |
|
431 |
|
382 |
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||
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July |
|
426 |
|
363 |
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||
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August |
|
433 |
|
386 |
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September |
|
384 |
|
398 |
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Third quarter average |
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$ |
414 |
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$ |
382 |
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Year-to-date average |
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$ |
441 |
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$ |
390 |
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Third quarter percentage change |
|
8.4 |
% |
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Year-to-date percentage change |
|
13.1 |
% |
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UFP INDUSTRIES, INC.
In addition, a Southern Yellow Pine ("SYP") composite price, which we prepare and use, is presented below. Our purchases of this species comprise almost two-thirds of our total lumber purchases.
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Random Lengths SYP |
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Average $/MBF |
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2025 |
2024 |
|||||
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January |
|
$ |
386 |
|
$ |
380 |
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February |
|
401 |
|
371 |
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||
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March |
|
424 |
|
394 |
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||
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April |
|
446 |
|
371 |
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||
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May |
|
445 |
|
353 |
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||
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June |
|
381 |
|
355 |
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||
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July |
|
351 |
|
333 |
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||
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August |
|
347 |
|
345 |
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||
|
September |
|
320 |
|
337 |
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Third quarter average |
|
$ |
339 |
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$ |
338 |
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Year-to-date average |
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$ |
389 |
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$ |
360 |
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|
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Third quarter percentage change |
|
|
0.3 |
% |
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Year-to-date percentage change |
|
|
8.1 |
% |
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|
Lumber prices in 2025 have declined since the Spring peak and September prices are lower year over year. The decline in overall lumber prices, in spite of higher duties on Canadian lumber imported to the United States, reflects the overall weak demand environment in the end markets that primarily consume softwood lumber - new housing, housing repair and remodel activity, and industrial (including packaging).
A change in lumber prices impacts profitability of products sold with fixed and variable prices, as discussed below.
IMPACT OF THE LUMBER MARKET ON OUR OPERATING RESULTS
We generally price our products to pass lumber costs through to our customers so that our profitability is based on the value-added manufacturing, distribution, engineering, and other services we provide. As a result, our dollar sales levels (and working capital requirements) are impacted by the lumber costs of our products. Lumber costs were 41.4% and 38.6% of our sales in the first nine months of 2025 and 2024, respectively.
Our gross margins are impacted by (1) the relative level of the Lumber Market (i.e. whether prices are higher or lower from comparative periods), and (2) the trend in the market price of lumber (i.e. whether the price of lumber is increasing or decreasing within a period or from period to period). Additionally, as explained below, product categories can be priced differently. Some of our products have fixed selling prices, while the selling prices of other products are indexed to the reported Lumber Market with a fixed dollar adder to cover conversion costs and profits. Consequently, the level and trend of the Lumber Market impact our products differently.
Below is a general description of the primary ways in which our products are priced.
| ● | Products with fixed selling prices.These products include value-added products, such as manufactured items, sold within all segments. Prices for these products are generally fixed at the time of the sales quotation for a specified period of time. In order to reduce any exposure to adverse trends in the price of component lumber products, we attempt to lock in costs with our suppliers or purchase necessary inventory for these sales commitments. The time period limitation eventually allows us to periodically re-price our products for changes in lumber costs from our suppliers. |
UFP INDUSTRIES, INC.
| ● | Products with selling prices indexed to the reported Lumber Market with a fixed dollar "adder" to cover conversion costs and profit.These products primarily include treated lumber, panel goods, other commodity-type items, and trusses sold to the manufactured housing industry. For these products, we estimate customers' needs and carry appropriate levels of inventory. Because lumber costs are incurred in advance of final sale prices, subsequent increases or decreases in the market price of lumber impact our gross margins. We believe our sales of these products are at their highest relative level in our second quarter, primarily due to pressure-treated lumber sold in our retail segment. |
For each of the product pricing categories above, our margins are exposed to changes in the trend of lumber prices. As a result of the balance in our net sales to each of our end markets, we believe our gross profits are more stable than those of our competitors who are less diversified.
The greatest risk associated with changes in the trend of lumber prices is on the following products:
| ● | Products with significant inventory levels with low turnover rates, whose selling prices are indexed to the Lumber Market.In other words, the longer the period of time these products remain in inventory, the greater the exposure to changes in the price of lumber. This includes treated lumber, which comprised approximately 22% of our total net sales in the first nine months of 2025. This exposure is less significant with remanufactured lumber, panel goods, other commodity-type items, and trusses sold to the manufactured housing market due to the higher rate of inventory turnover. We attempt to mitigate the risk associated with treated lumber through managed inventory programs with our vendors. We estimate that 18% of our total purchases for the first nine months of 2025 were transacted under these programs. (Please refer to the "Risk Factors" section of our annual report on form 10-K, filed with the United States Securities and Exchange Commission.) |
| ● | Products with fixed selling prices sold under long-term supply arrangements, particularly those involving multi-family construction projects.We attempt to mitigate this risk through our purchasing practices and longer vendor commitments. |
In addition to the impact of Lumber Market trends on gross margins, changes in the level of the market cause fluctuations in gross margins when comparing operating results from period to period. This is explained in the following example, which assumes the price of lumber has increased from period one to period two, with no changes in the trend within each period.
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Period 1 |
Period 2 |
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Lumber cost |
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$ |
300 |
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$ |
400 |
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Conversion cost |
|
50 |
|
50 |
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|
= Product cost |
|
350 |
|
450 |
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|
Adder |
|
50 |
|
50 |
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= Sell price |
|
$ |
400 |
|
$ |
500 |
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Gross margin |
|
12.5 |
% |
10.0 |
% |
||
As is apparent from the preceding example, the level of lumber prices does not impact our overall profits but does impact our margins. Gross margins and operating margins are negatively impacted during periods of high lumber prices; conversely, we experience margin improvement when lumber prices are relatively low.
UFP INDUSTRIES, INC.
IMPACT OF TARIFFS ON OUR OPERATING RESULTS
The proposed tariffs in Canada continue to be paused. If they are activated, the demand for domestic lumber products may increase, which will likely result in higher costs if capacity gets challenged. Although the trade landscape continues to evolve, since we do not own any foreign sawmills and have excellent relationships with our mill partners, we believe we are currently in a strong position to adapt quickly to tariffs without material adverse financial impact after a short adjustment period. We will continue to monitor the market and intend to make decisions quickly to minimize disruption. As of September 27, 2025, 77% of our lumber purchases are from domestic suppliers and 16% are imported from Canada, and 7% are imported from other international suppliers.
BUSINESS COMBINATIONS AND ASSET PURCHASES
We completed two business acquisitions in fiscal 2025 and one in fiscal 2024. The annual historical sales attributable to these acquisitions are approximately $49 million. These business combinations are not significant to our quarterly results and thus proforma results for 2025 and 2024 are not presented.
See Notes to the Unaudited Interim Condensed Consolidated Financial Statements, Note F, "Business Combinations" for additional information.
RESULTS OF OPERATIONS
The following table presents, for the periods indicated, the components of our Unaudited Condensed Consolidated Statements of Earnings as a percentage of net sales.
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Three Months Ended |
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Nine Months Ended |
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September 27, |
September 28, |
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September 27, |
September 28, |
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2025 |
2024 |
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2025 |
2024 |
||||
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Net sales |
100.0 |
% |
100.0 |
% |
|
100.0 |
% |
100.0 |
% |
|
Cost of goods sold |
83.2 |
81.9 |
|
83.1 |
81.0 |
||||
|
Gross profit |
16.8 |
18.1 |
|
16.9 |
19.0 |
||||
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Selling, general, and administrative expenses |
10.9 |
11.1 |
|
10.6 |
11.1 |
||||
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Net loss (gain) on disposition and impairment of assets |
0.2 |
|
- |
|
|
0.1 |
|
- |
|
|
Other losses (gains), net |
- |
(0.3) |
|
- |
(0.1) |
||||
|
Earnings from operations |
5.7 |
7.3 |
|
6.1 |
8.0 |
||||
|
Interest and other |
(0.6) |
(0.9) |
|
(0.5) |
(0.7) |
||||
|
Earnings before income taxes |
6.4 |
8.1 |
|
6.6 |
8.7 |
||||
|
Income taxes |
1.5 |
2.0 |
|
1.5 |
1.9 |
||||
|
Net earnings |
4.8 |
6.2 |
|
5.1 |
6.7 |
||||
|
Less net earnings attributable to noncontrolling interest |
- |
(0.1) |
|
- |
- |
||||
|
Net earnings attributable to controlling interest |
4.8 |
% |
6.1 |
% |
|
5.1 |
% |
6.7 |
% |
Note: Actual percentages are calculated and may not sum to total due to rounding.
As a result of the impact of the level of lumber prices on the percentages displayed in the table above (see Impact of the Lumber Market on Our Operating Results), we believe it is useful to compare our change in units sold with our change in gross profits, selling, general, and administrative expenses, and operating profits as presented in the following table.
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Percentage Change |
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Percentage Change |
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Three Months Ended |
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Nine Months Ended |
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September 27, |
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September 28, |
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September 27, |
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September 28, |
|||||
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2025 |
2024 |
2025 |
2024 |
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Units sold |
(4.0) |
% |
|
(3.0) |
% |
|
(3.0) |
% |
|
(2.0) |
% |
|
|
Gross profit |
|
(12.0) |
|
|
(18.1) |
|
|
(14.5) |
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|
(12.1) |
|
|
Selling, general, and administrative expenses |
|
(7.3) |
|
|
(6.3) |
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|
(8.2) |
|
|
(2.8) |
|
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Earnings from operations |
|
(25.4) |
|
|
(28.3) |
|
|
(26.2) |
|
|
(21.0) |
|
UFP INDUSTRIES, INC.
The following table presents, for the periods indicated, our selling, general, and administrative (SG&A) costs as a percentage of gross profit. Over time, we believe this ratio provides an enhanced view of our effectiveness in managing these costs given our strategies to enhance our capabilities and improve our value-added product offering and recognizing the higher relative level of SG&A these strategies require. This ratio also mitigates the impact of changing lumber prices. The increase in the ratio of SG&A as a percentage of gross profit from the prior year is primarily due to the impact of competitive pricing and higher material costs for most of the year, which has reduced our gross profits.
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Three Months Ended |
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Nine Months Ended |
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September 27, |
|
September 28, |
|
September 27, |
|
September 28, |
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2025 |
|
2024 |
|
2025 |
|
2024 |
||||
|
Gross profit |
$ |
262,681 |
|
$ |
298,412 |
|
$ |
843,611 |
|
$ |
987,233 |
|
Selling, general, and administrative expenses |
$ |
170,030 |
|
$ |
183,341 |
|
$ |
531,279 |
|
$ |
578,555 |
|
SG&A as percentage of gross profit |
64.7% |
|
61.4% |
|
63.0% |
|
58.6% |
||||
Operating Results by Segment:
Our business segments consist of UFP Retail Solutions ("Retail"), UFP Packaging ("Packaging") and UFP Construction ("Construction"), and align with the end markets we serve. Among other advantages, this structure allows for a more specialized and consistent sales approach, more efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit, and business units are included in our Retail, Packaging, and Construction segments. The exception to this market-centered reporting and management structure is our International segment, which comprises our packaging operations in Mexico, Canada, Spain, India, and Australia and sales and buying offices in other parts of the world. Our International segment and Ardellis (our insurance captive) are included in the "All Other" column of the table below. The "Corporate" column includes purchasing, transportation, corporate ventures, and administrative functions that serve our operating segments. Operating results of Corporate primarily consists of over (under) allocated costs. The operating results of UFP Real Estate, Inc., which owns and leases real estate, and UFP Transportation Ltd., which owns, leases, and operates transportation equipment, are also included in the Corporate column. Inter-company lease and services charges are assessed to our operating segments for the use of these assets and services at fair market value rates.
The following tables present our operating results, for the periods indicated, by segment (in thousands).
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Three Months Ended September 27, 2025 |
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Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
||||||
|
Net sales |
|
$ |
593,985 |
|
$ |
394,949 |
|
$ |
496,465 |
|
$ |
72,482 |
|
$ |
1,746 |
|
$ |
1,559,627 |
|
Cost of goods sold |
|
513,763 |
|
327,528 |
|
405,262 |
|
59,251 |
|
|
(8,858) |
|
|
1,296,946 |
||||
|
Gross profit |
|
|
80,222 |
|
|
67,421 |
|
|
91,203 |
|
|
13,231 |
|
|
10,604 |
|
|
262,681 |
|
Selling, general, administrative expenses |
|
|
49,032 |
|
|
45,831 |
|
|
58,943 |
|
|
9,226 |
|
|
6,998 |
|
|
170,030 |
|
Net loss (gain) on disposition and impairment of assets |
|
|
9,983 |
|
|
(5,970) |
|
|
(59) |
|
|
63 |
|
|
(1,559) |
|
|
2,458 |
|
Other losses (gains), net |
|
462 |
|
|
- |
|
|
(3) |
|
|
203 |
|
|
60 |
|
|
722 |
|
|
Earnings from operations |
|
$ |
20,745 |
|
$ |
27,560 |
|
$ |
32,322 |
|
$ |
3,739 |
|
$ |
5,105 |
|
$ |
89,471 |
UFP INDUSTRIES, INC.
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Three Months Ended September 28, 2024 |
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||||||||
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Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
||||||
|
Net sales |
|
$ |
635,571 |
|
$ |
401,626 |
|
$ |
534,625 |
|
$ |
75,802 |
|
$ |
1,759 |
|
$ |
1,649,383 |
|
Cost of goods sold |
|
542,516 |
|
330,381 |
|
422,967 |
|
61,350 |
|
|
(6,243) |
|
|
1,350,971 |
||||
|
Gross profit |
|
|
93,055 |
|
|
71,245 |
|
|
111,658 |
|
|
14,452 |
|
|
8,002 |
|
|
298,412 |
|
Selling, general, administrative expenses |
|
|
54,113 |
|
|
49,352 |
|
|
69,046 |
|
|
13,696 |
|
|
(2,866) |
|
|
183,341 |
|
Net (gain) loss on disposition and impairment of assets |
|
|
(9) |
|
|
28 |
|
|
(64) |
|
|
(4) |
|
|
(404) |
|
|
(453) |
|
Other (gains) losses, net |
|
(2,861) |
|
|
- |
|
|
276 |
|
|
(1,787) |
|
|
(30) |
|
|
(4,402) |
|
|
Earnings from operations |
|
$ |
41,812 |
|
$ |
21,865 |
|
$ |
42,400 |
|
$ |
2,547 |
|
$ |
11,302 |
|
$ |
119,926 |
|
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|
Nine Months Ended September 27, 2025 |
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|||||
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|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
||||||
|
Net sales |
|
$ |
1,989,592 |
|
$ |
1,233,626 |
|
$ |
1,563,995 |
|
$ |
197,806 |
|
$ |
5,501 |
|
$ |
4,990,520 |
|
Cost of goods sold |
|
1,714,335 |
|
1,026,049 |
|
1,281,803 |
|
160,706 |
|
|
(35,984) |
|
|
4,146,909 |
||||
|
Gross profit |
|
|
275,257 |
|
|
207,577 |
|
|
282,192 |
|
|
37,100 |
|
|
41,485 |
|
|
843,611 |
|
Selling, general, administrative expenses |
|
|
163,029 |
|
|
136,748 |
|
|
185,454 |
|
|
28,086 |
|
|
17,962 |
|
|
531,279 |
|
Net loss (gain) on disposition and impairment of assets |
|
|
11,090 |
|
|
(4,713) |
|
|
272 |
|
|
2,679 |
|
|
(3,116) |
|
|
6,212 |
|
Other losses (gains), net |
|
|
780 |
|
|
- |
|
|
268 |
|
|
451 |
|
|
(193) |
|
|
1,306 |
|
Earnings from operations |
|
$ |
100,358 |
|
$ |
75,542 |
|
$ |
96,198 |
|
$ |
5,884 |
|
$ |
26,832 |
|
$ |
304,814 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 28, 2024 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
||||||
|
Net sales |
|
$ |
2,073,403 |
|
$ |
1,261,248 |
|
$ |
1,627,068 |
|
$ |
224,219 |
|
$ |
4,370 |
|
$ |
5,190,308 |
|
Cost of goods sold |
|
1,752,464 |
|
1,020,877 |
|
1,275,520 |
|
171,916 |
|
|
(17,702) |
|
|
4,203,075 |
||||
|
Gross profit |
|
|
320,939 |
|
|
240,371 |
|
|
351,548 |
|
|
52,303 |
|
|
22,072 |
|
|
987,233 |
|
Selling, general, administrative expenses |
|
|
175,014 |
|
|
156,289 |
|
|
211,503 |
|
|
41,663 |
|
|
(5,914) |
|
|
578,555 |
|
Net loss (gain) on disposition and impairment of assets |
|
|
877 |
|
|
1,455 |
|
|
222 |
|
|
10 |
|
|
(1,026) |
|
|
1,538 |
|
Other (gains) losses, net |
|
|
(2,527) |
|
|
- |
|
|
70 |
|
|
(3,286) |
|
|
100 |
|
|
(5,643) |
|
Earnings from operations |
|
$ |
147,575 |
|
$ |
82,627 |
|
$ |
139,753 |
|
$ |
13,916 |
|
$ |
28,912 |
|
$ |
412,783 |
UFP INDUSTRIES, INC.
The following tables present the components of our operating results, for the periods indicated, as a percentage of net sales by segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 27, 2025 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
|
|
Net sales |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
N/A |
|
100.0 |
% |
|
Cost of goods sold |
|
86.5 |
|
82.9 |
|
81.6 |
|
81.7 |
|
- |
|
83.2 |
|
|
Gross profit |
|
13.5 |
|
17.1 |
|
18.4 |
|
18.3 |
|
- |
|
16.8 |
|
|
Selling, general, administrative expenses |
|
8.3 |
|
11.6 |
|
11.9 |
|
12.7 |
|
- |
|
10.9 |
|
|
Net loss (gain) on disposition and impairment of assets |
|
1.7 |
|
(1.5) |
|
- |
|
0.1 |
|
- |
|
0.2 |
|
|
Other losses (gains), net |
|
0.1 |
|
- |
|
- |
|
0.3 |
|
- |
|
- |
|
|
Earnings from operations |
|
3.5 |
% |
7.0 |
% |
6.5 |
% |
5.2 |
% |
- |
|
5.7 |
% |
Note: Actual percentages are calculated and may not sum to total due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 28, 2024 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
|
|
Net sales |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
N/A |
|
100.0 |
% |
|
Cost of goods sold |
|
85.4 |
|
82.3 |
|
79.1 |
|
80.9 |
|
- |
|
81.9 |
|
|
Gross profit |
|
14.6 |
|
17.7 |
|
20.9 |
|
19.1 |
|
- |
|
18.1 |
|
|
Selling, general, administrative expenses |
|
8.5 |
|
12.3 |
|
12.9 |
|
18.1 |
|
- |
|
11.1 |
|
|
Net (gain) loss on disposition and impairment of assets |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
Other (gains) losses, net |
|
(0.5) |
|
- |
|
0.1 |
|
(2.4) |
|
- |
|
(0.3) |
|
|
Earnings from operations |
|
6.6 |
% |
5.4 |
% |
7.9 |
% |
3.4 |
% |
- |
|
7.3 |
% |
Note: Actual percentages are calculated and may not sum to total due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 27, 2025 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
|
|
Net sales |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
N/A |
|
100.0 |
% |
|
Cost of goods sold |
|
86.2 |
|
83.2 |
|
82.0 |
|
81.2 |
|
- |
|
83.1 |
|
|
Gross profit |
|
13.8 |
|
16.8 |
|
18.0 |
|
18.8 |
|
- |
|
16.9 |
|
|
Selling, general, administrative expenses |
|
8.2 |
|
11.1 |
|
11.9 |
|
14.2 |
|
- |
|
10.6 |
|
|
Net loss (gain) on disposition and impairment of assets |
|
0.6 |
|
(0.4) |
|
- |
|
1 |
|
- |
|
0.1 |
|
|
Other losses (gains), net |
|
- |
|
- |
|
- |
|
0.2 |
|
- |
|
- |
|
|
Earnings from operations |
|
5.0 |
% |
6.1 |
% |
6.2 |
% |
3.0 |
% |
- |
|
6.1 |
% |
Note: Actual percentages are calculated and may not sum to total due to rounding.
UFP INDUSTRIES, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 28, 2024 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Retail |
|
Packaging |
|
Construction |
|
All Other |
|
Corporate |
|
Total |
|
|
Net sales |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
N/A |
|
100.0 |
% |
|
Cost of goods sold |
|
84.5 |
|
80.9 |
|
78.4 |
|
76.7 |
|
- |
|
81.0 |
|
|
Gross profit |
|
15.5 |
|
19.1 |
|
21.6 |
|
23.3 |
|
- |
|
19.0 |
|
|
Selling, general, administrative expenses |
|
8.4 |
|
12.4 |
|
13.0 |
|
18.6 |
|
- |
|
11.1 |
|
|
Net loss (gain) on disposition and impairment of assets |
|
- |
|
0.1 |
|
- |
|
- |
|
- |
|
- |
|
|
Other (gains) losses, net |
|
(0.1) |
|
- |
|
- |
|
(1.5) |
|
- |
|
(0.1) |
|
|
Earnings from operations |
|
7.1 |
% |
6.6 |
% |
8.6 |
% |
6.2 |
% |
- |
|
8.0 |
% |
Note: Actual percentages are calculated and may not sum to total due to rounding.
NET SALES
We design, manufacture and market wood and wood-alternative products, primarily used to enhance outdoor living environments; for national home centers and other retailers; for engineered wood components, structural lumber, and other products for factory-built and site-built residential and commercial construction; customized interior fixtures used in a variety of retail stores, commercial, and other structures; and structural wood packaging, components and packing materials for various industries. Our strategic long-term sales objectives include:
| ● | Maximizing unit sales growth while achieving return on investment goals.The following table presents estimates, for the periods indicated, of our percentage change in net sales attributable to changes in overall selling prices versus changes in units shipped by segment. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change |
|||||||||
|
|
|
Third Quarter 2025 versus Third Quarter 2024 |
|||||||||
|
|
in Sales |
in Selling |
in Units |
Acquisition Unit Change |
Organic Unit Change |
||||||
|
Retail |
|
(6.5) |
% |
(0.5) |
% |
(6.0) |
% |
- |
% |
(6.0) |
% |
|
Packaging |
|
(1.7) |
% |
0.3 |
% |
(2.0) |
% |
1.0 |
% |
(3.0) |
% |
|
Construction |
|
(7.1) |
% |
(5.1) |
% |
(2.0) |
% |
- |
% |
(2.0) |
% |
|
All Other |
|
(4.4) |
% |
(2.4) |
% |
(2.0) |
% |
- |
% |
(2.0) |
% |
|
Corporate |
|
(0.7) |
% |
0.3 |
% |
(1.0) |
% |
- |
% |
(1.0) |
% |
|
Total Sales |
|
(5.4) |
% |
(1.4) |
% |
(4.0) |
% |
- |
% |
(4.0) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change |
|||||||||
|
|
|
Year-to-Date 2025 versus Year-to-Date 2024 |
|||||||||
|
|
|
in Sales |
in Selling |
in Units |
Acquisition Unit Change |
Organic Unit Change |
|||||
|
Retail |
|
(4.0) |
% |
1.0 |
% |
(5.0) |
% |
- |
% |
(5.0) |
% |
|
Packaging |
|
(2.2) |
% |
(2.2) |
% |
- |
% |
1.0 |
% |
(1.0) |
% |
|
Construction |
|
(3.9) |
% |
(4.9) |
% |
1.0 |
% |
- |
% |
1.0 |
% |
|
All Other |
|
(11.8) |
% |
1.2 |
% |
(13.0) |
% |
- |
% |
(13.0) |
% |
|
Corporate |
|
25.9 |
% |
(0.1) |
% |
26.0 |
% |
- |
% |
26.0 |
% |
|
Total Sales |
|
(3.8) |
% |
(0.8) |
% |
(3.0) |
% |
- |
% |
(3.0) |
% |
| ● | Expanding geographically in our higher margin core businesses. |
UFP INDUSTRIES, INC.
| ● | Increasing our sales of "value-added" products and enhancing our product offering with new or improved products.Value-added products generally consist of fencing, decking, lattice, and other specialty products sold in the Retail segment; structural and protective packaging and machine-built pallets sold in the Packaging segment; engineered wood components, customized interior fixtures, manufactured and assembled concrete forms sold in the Construction segment; and "wood alternative" products. Engineered wood components include roof trusses, wall panels, and floor systems. Wood-alternative products consist of products manufactured with wood and non-wood composites, metals and plastics sold in each of our segments. Although we consider the treatment of dimensional lumber and panels with certain chemical preservatives a value-added process, treated lumber is not presently included in the value-added sales totals. Remanufactured lumber and panels that are components of finished goods are also generally categorized as "commodity-based" products. We estimate that approximately 81% of our sales consist of products we manufacture at our locations, while 19% of our sales consist of products manufactured by suppliers that we inventory and distribute to customers. |
The following table presents, for the periods indicated, our percentage of value-added and commodity-based sales to total sales by our segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 27, 2025 |
|
Three Months Ended September 28, 2024 |
|
||||||||
|
|
Value-Added |
Commodity-Based |
Value-Added |
Commodity-Based |
|
||||||||
|
Retail |
52.6 |
% |
|
47.4 |
% |
53.4 |
% |
|
46.6 |
% |
|
||
|
Packaging |
|
75.4 |
% |
|
24.6 |
% |
|
76.1 |
% |
|
23.9 |
% |
|
|
Construction |
|
81.8 |
% |
|
18.2 |
% |
|
81.2 |
% |
|
18.8 |
% |
|
|
All Other |
|
73.3 |
% |
|
26.7 |
% |
|
74.6 |
% |
|
25.4 |
% |
|
|
Corporate |
|
82.4 |
% |
|
17.6 |
% |
|
49.3 |
% |
|
50.7 |
% |
|
|
Total Sales |
|
68.5 |
% |
|
31.5 |
% |
|
68.8 |
% |
|
31.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 27, 2025 |
|
Nine Months Ended September 28, 2024 |
|
||||||||
|
|
Value-Added |
Commodity-Based |
Value-Added |
Commodity-Based |
|||||||||
|
Retail |
52.2 |
% |
|
47.8 |
% |
53.1 |
% |
|
46.9 |
% |
|
||
|
Packaging |
|
75.1 |
% |
|
24.9 |
% |
|
75.6 |
% |
|
24.4 |
% |
|
|
Construction |
|
80.8 |
% |
|
19.2 |
% |
|
80.4 |
% |
|
19.6 |
% |
|
|
All Other |
|
75.3 |
% |
|
24.7 |
% |
|
75.9 |
% |
|
24.1 |
% |
|
|
Corporate |
|
68.3 |
% |
|
31.7 |
% |
|
55.9 |
% |
|
44.1 |
% |
|
|
Total Sales |
|
67.6 |
% |
|
32.4 |
% |
|
68.0 |
% |
|
32.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain prior year product reclassifications and the change in designation of certain products as "value-added" resulted in a change in prior year's sales. |
|||||||||||||
Our overall unit sales of value-added products were down 6% in the third quarter and 3% in the first nine months of 2025 compared to the prior year. Our overall unit sales of commodity-based products decreased approximately 5% in the third quarter and 4% in the first nine months of 2025 compared to the prior year.
| ● | Developing new products.We define new products as those that will generate sales of at least $1 million per year within 4 years of launch and are still growing and gaining market penetration and meet our internal definition of value-added products. New product sales in the third quarter and first nine months of 2025 increased 12% and 3%, respectively. Approximately $58.5 million of new product sales for the first nine months of 2024, while they continue to be sold, were sunset in 2025 and excluded from the table below because they no longer meet the definition above. Our short-term goal is to achieve annual new product sales of at least $550 million in 2025. For the first nine months of 2025, new product sales totaled $360 million. Our long-term goal is for new products to comprise at least 10% of our total net sales. |
UFP INDUSTRIES, INC.
The table below presents new product sales in thousands:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Product Sales by Segment |
|
|
||||||||||||
|
|
|
Three Months Ended |
|
|
||||||||||||
|
|
September 27, |
|
% of Segment |
September 28, |
|
% of Segment |
% Change |
|||||||||
|
|
|
2025 |
|
Net Sales |
|
2024 |
|
Net Sales |
|
in Sales |
|
|||||
|
Retail |
|
$ |
55,277 |
|
9.3 |
% |
|
|
43,638 |
|
6.9 |
% |
26.7 |
% |
|
|
|
Packaging |
|
43,523 |
|
11.0 |
% |
|
|
45,497 |
|
11.3 |
% |
(4.3) |
% |
|
||
|
Construction |
|
|
18,592 |
|
3.7 |
% |
|
|
15,128 |
|
2.8 |
% |
|
22.9 |
% |
|
|
All Other |
|
|
50 |
|
0.1 |
% |
|
|
164 |
|
0.2 |
% |
|
(69.5) |
% |
|
|
Corporate |
|
766 |
|
43.9 |
% |
|
|
704 |
|
40.0 |
% |
8.8 |
% |
|
||
|
Total New Product Sales |
|
118,208 |
|
7.6 |
% |
|
|
105,131 |
|
6.4 |
% |
12.4 |
% |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain prior year product reclassifications and the change in designation of certain products as "new" resulted in a change in prior year's sales. |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Product Sales by Segment |
|
|
||||||||||||
|
|
|
Nine Months Ended |
|
|
||||||||||||
|
|
September 27, |
|
% of Segment |
September 28, |
|
% of Segment |
% Change |
|
||||||||
|
|
|
2025 |
|
Net Sales |
|
2024 |
|
Net Sales |
|
in Sales |
|
|||||
|
Retail |
|
$ |
170,487 |
|
8.6 |
% |
|
$ |
148,153 |
|
7.1 |
% |
15.1 |
% |
|
|
|
Packaging |
|
133,555 |
|
10.8 |
% |
|
|
142,841 |
|
11.3 |
% |
(6.5) |
% |
|
||
|
Construction |
|
|
53,845 |
|
3.4 |
% |
|
|
56,844 |
|
3.5 |
% |
|
(5.3) |
% |
|
|
All Other |
|
|
296 |
|
0.1 |
% |
|
|
573 |
|
0.3 |
% |
|
(48.3) |
% |
|
|
Corporate |
|
2,091 |
|
38.0 |
% |
|
|
1,875 |
|
42.9 |
% |
11.5 |
% |
|
||
|
Total New Product Sales |
|
360,274 |
|
7.2 |
% |
|
|
350,286 |
|
6.7 |
% |
2.9 |
% |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain prior year product reclassifications and the change in designation of certain products as "new" resulted in a change in prior year's sales. |
||||||||||||||||
Retail Segment
Net sales in the third quarter of 2025 decreased by 7% compared to the same period of 2024 due to a 6% decrease in units and a 1% decrease in selling prices. Unit changes within this segment consisted of a 5% decrease in ProWood and 31% decrease in Edge as we complete the closure of our Bonner, Montana plants and transition production to other facilities, partially offset by a 5% increase in Deckorators. Our unit sales to big box customers, which we believe are more closely correlated with repair and remodel activity, decreased approximately 6%, while unit sales to independent retailers, which we believe are more closely correlated to new housing starts, also decreased approximately 6%. Of the 6% increase in net sales for our Deckorators business unit compared to the same period of 2024, wood-plastic composite decking and mineral-based-composite decking (sold under our new Surestone tradename) increased 9% and 31% from the prior year, respectively, partially offset by railings which declined 13% from the prior year. The decline in our railing sales is due to lost market share with a big box customer which began impacting sales at the beginning of the year. However, we gained market share with another big box customer which began to more favorably impact our sales beginning in July as initial stocking orders were received for one of our mineral-based composite decking products. Overall, for the remainder of this year, we believe our Deckorators business unit will benefit from a modest net gain in market share as we continue stocking additional stores and as the new capacity we've added to produce our mineral-based composite decking reaches our throughput targets. We expect to realize the full benefit of our net market share gain in 2026. Our long-term goal is to double our market share of composite decking and railing over the next 5 years. The decline in ProWood volume is primarily due to higher interest rates and weaker consumer sentiment resulting in a softening of demand to complete repair and remodel projects.
UFP INDUSTRIES, INC.
Gross profits decreased by $13 million, or 14% to $80 million for the third quarter of 2025 compared to the same period last year. The change in gross profit was attributable to the following:
| ● | The gross profit of our ProWood pressure-treated products decreased by $4 million, primarily due to falling lumber prices. Additionally, gross profits associated with our Edge products declined by $4 million due to inefficiencies associated with the closure of our Edge manufacturing facilities in Bonner, MT and shift of volume to other locations. |
| ● | The gross profit of our Deckorators business unit decreased by $4 million primarily due to lower railing sales and inefficiencies associated with adding new capacity to produce our mineral-based composite decking. We believe this new, more efficient technology will allow us to achieve our target cost per unit. In addition, our wood plastic composite plant experienced an unfavorable change in product mix. |
SG&A decreased by $5 million, or 9%, in the third quarter of 2025 compared to the same period of 2024. Accrued bonus expense, which varies with overall profitability and return on investment of the segment, decreased $4 million from the third quarter of 2024 and totaled $8 million for the quarter. This decrease, along with a decrease in wages and benefits of $2 million and many other small decreases totaling $6 million, was partially offset by an increase in advertising of $7 million related to our efforts to build brand awareness of our Deckorators Surestone decking.
Earnings from operations decreased in the third quarter of 2025 compared to 2024 by $21 million, or 50%, as a result of the factors mentioned above, as well as a foreign exchange loss totaling $1 million in 2025 compared to a gain of $3 million in 2024, and an increase in the net loss on disposition and impairment of assets, which was comprised of machinery and equipment impairment charges of $11 million, lease impairment charges of $2 million and intangible asset impairment charges of $2 million, partially offset by a gain on the sale of machinery and equipment totaling $5 million.
Net sales in the first nine months of 2025 decreased by 4% compared to the same period of 2024, due to a 5% decrease in units, partially offset by a 1% increase in selling prices. Unit changes within this segment consisted of decreases of 3% in Deckorators, 5% in ProWood, and 15% in Edge as we complete the closure of our Bonner, Montana plants and transition production to other facilities. Unit sales to big box customers decreased approximately 5%, while unit sales to independent retailers decreased approximately 6%. Within our Deckorators business unit, our sales of railings decreased by 26% due to the lost market share described above. These decreases were partially offset by a 34% increase in our mineral-based-composite decking as consumers continue to see the benefits of its superior product attributes and a 1% increase in wood-plastic composite decking.
Gross profits decreased by $46 million, or 14% to $275 million for the first nine months of 2025 compared to the same period in 2024. The change in gross profit was attributable to the following:
| ● | The gross profits of our ProWood business unit decreased $22 million, primarily due to a decline in unit sales as a result of softer demand and the impact of declining lumber prices on our selling prices. The products sold by this business unit are primarily at a variable selling price determined at the time of shipment. Additionally, gross profits associated with our Edge products declined by $9 million due to the closure of our Edge manufacturing facilities in Bonner, MT and transition of this production to other facilities. |
| ● | The gross profit of our Deckorators business unit decreased by $12 million due to the decline in railing sales mentioned above and a temporary increase in our cost per unit of composite decking as we've experienced inefficiencies while adding new capacity in our mineral based composite plant and our wood plastic composite plant has experienced an unfavorable change in sales mix. |
SG&A decreased by approximately $12 million, or 7%, in the first nine months of 2025 compared to the same period of 2024. The overall decrease was due to a decline in accrued bonus expense of $13 million, which totaled $32 million for the first nine months of 2025, as well as a $4 million decrease in wages and benefits, and many smaller decreases in several accounts totaling $12 million. These decreases were partially offset by an increase in advertising of $17 million primarily related to Deckorators.
UFP INDUSTRIES, INC.
Earnings from operations decreased in the first nine months of 2025 compared to 2024 by $47 million, or 32%, as a result of the factors mentioned above as well as a foreign exchange loss totaling $1 million in 2025 compared to a gain of $3 million in 2024, and an increase in the net loss on disposition and impairment of assets, which was comprised of machinery and equipment impairment charges of $11 million, lease impairment charges of $2 million and intangible asset impairment charges of $2 million, partially offset by a gain on the sale of machinery and equipment totaling $5 million.
Packaging Segment
Net sales in the third quarter of 2025 decreased 2% compared to the same period of 2024, due to a 3% decrease in organic unit sales, partially offset by an acquired business which contributed 1% to unit growth. Organic unit changes consist of a 5% decrease in Structural Packaging and 4% in PalletOne, partially offset by a 15% increase in Protective Packaging due to geographic expansion and market share gains.
Gross profits decreased by $4 million, or 5%, for the third quarter of 2025 compared to the same period last year. The change in gross profit was attributable to the following:
| ● | The gross profit of our structural packaging business unit increased by $1 million. |
| ● | The gross profit of our PalletOne business unit decreased by $5 million primarily due to competitive price pressure which more than offset the favorable impact of unit sales growth as we continue to execute our strategy to gain market share. |
| ● | The gross profit of our protective packaging business unit remained flat compared to last year. |
SG&A decreased by approximately $4 million, or 7%, in the third quarter of 2025 compared to the same period of 2024. The decrease is attributable to a decrease in wages and benefits of $1 million and many smaller decreases in several accounts totaling $4 million. Accrued bonus expense increased approximately $1 million relative to the same period of 2024 and totaled $9 million for the quarter.
Earnings from operations increased in the third quarter of 2025 compared to 2024 by $6 million, or 26%, due to the factors discussed above, as well as an increase in the net gain on disposition and impairment of assets, which was comprised of a gain on the sale of machinery and equipment totaling $6 million.
Net sales in the first nine months of 2025 decreased 2% compared to the same period of 2024, due to a 2% decrease in selling prices, due to competitive price pressure, and a 1% decrease in organic unit sales, partially offset by an acquired business which contributed 1% to unit growth. Organic unit changes consist of a 4% decrease in structural packaging, primarily due to a decline in demand, partially offset by 12% unit growth in Protective Packaging due to geographic expansion and market share gains. Unit sales at PalletOne increased 5% due to acquisitions; there was no change in organic unit sales.
Gross profits decreased by $33 million, or 14%, for the first nine months of 2025 compared to the same period in 2024. The change in gross profits was attributable to the following.
| ● | The gross profit of our structural packaging business unit decreased by a total of $17 million. The decline in gross profit is primarily due to lower unit sales and competitive price pressure due to lower demand. |
| ● | The gross profit of our PalletOne business unit decreased by $15 million primarily due to competitive price pressure as we continue to execute our strategy to increase market share. |
| ● | The gross profit of our protective packaging business unit decreased by $1 million. |
UFP INDUSTRIES, INC.
SG&A decreased by approximately $20 million, or 13%, in the first nine months of 2025 compared to the same period of 2024. Accrued bonus expense decreased $5 million, and totaled $25 million for the nine months of 2025. The remaining decrease is attributable to a $3 million decrease in insurance costs, a $2 million decrease in sales incentive compensation, a $2 million decrease in travel and entertainment expenses, $1 million decrease in wages and benefits, and many smaller decreases in several accounts totaling $7 million.
Earnings from operations decreased in the first nine months of 2025 compared to 2024 by $7 million, or 9%, due to the factors discussed above, partially offset by an increase in the net gain on disposition and impairment of assets, which comprised of a gain on the sale of machinery and equipment totaling $5 million in 2025 compared to a $1 million loss in 2024.
Construction Segment
Net sales in the third quarter of 2025 decreased 7% compared to the same period of 2024 due to a 5% decrease in selling prices, due to competitive price pressure in our site-built business unit, and a 2% decrease in unit sales. We experienced a unit sales decrease in site-built of 15% due to weaker demand for housing, which was partially offset by increases of 4% in factory-built, 13% in commercial construction, and 12% in concrete forming. Our growth in factory-built is primarily due to an increase in industry production. As of September 27, 2025 and September 28, 2024, we estimate that our backlog of orders in our site-built housing business unit were $53 million and $80 million, respectively.
Gross profits decreased by $21 million, or 18%, in the third quarter of 2025 compared to the same period of 2024. The change in our gross profit was comprised of the following:
| ● | The gross profit of our site-built housing business unit decreased by $27 million, primarily due to a decline in unit sales and competitive price pressure due to weaker demand. |
| ● | The gross profit of our commercial construction business unit increased by $3 million due the favorable impact from unit sales growth. |
| ● | The gross profit of our factory-built business unit increased by $2 million due to an increase in unit sales. |
| ● | The gross profit of our concrete-forming business unit increased by $2 million due to an increase in unit sales. |
SG&A decreased by approximately $10 million, or 15%, in the third quarter of 2025 compared to the same period of 2024. Accrued bonus expense decreased by $3 million and totaled $10 million for the quarter. The decrease in SG&A was also attributable to a decrease in wages and benefits of $2 million, bad debts of $2 million, and many smaller decreases in several accounts totaling $3 million.
Earnings from operations decreased in the third quarter of 2025 compared to 2024 by $10 million, or 24%, due to the factors mentioned above.
Net sales in the first nine months of 2025 decreased 4% compared to the same period of 2024 and consisted of a 5% decrease in selling prices, partially offset by a 1% increase in unit sales. Unit changes within this segment consist of increases of 8% in factory-built, primarily due to an increase in industry production, 8% in concrete forming, and 8% in commercial construction. These increases were offset by a unit decline of 9% in site-built housing due to lower demand.
Gross profits decreased by $69 million, or 20% for the first nine months of 2025 compared to the same period of 2024. The change in our gross profit was comprised of the following:
| ● | The gross profit of our site-built housing business unit decreased by $77 million primarily due to a decline in unit sales and competitive price pressure. |
UFP INDUSTRIES, INC.
| ● | The gross profit of our commercial construction business unit remained flat as a result of increased material costs, which was offset by a favorable impact from unit sales growth. |
| ● | The gross profit of our concrete forming business unit increased by $4 million due to higher unit sales. |
| ● | The gross profit of our factory-built business unit increased $4 million as a result of increased unit sales. |
SG&A decreased by approximately $26 million, or 12%, in the first nine months of 2025 compared to the same period of 2024. Accrued bonus expenses decreased $13 million and totaled $30 million for the first nine months of 2025. The decrease in SG&A was also attributable to a decrease in our sales incentive compensation totaling $4 million, wages and benefits totaling $3 million, travel expense totaling $2 million, and many smaller decreases in several accounts totaling $4 million.
Earnings from operations decreased in the first nine months of 2025 compared to 2024 by $44 million, or 31%, due to the factors mentioned above.
All Other Segment
Our All Other reportable segment consists of our International and Ardellis (our insurance captive) segments that are not significant.
Corporate
The corporate segment consists of over (under) allocated costs that are not significant.
INCOME TAXES
Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for foreign, state and local income taxes and permanent tax differences. Our effective tax rate was 23.8% in the third quarter of 2025 compared to 24.2% in the same period of 2024 and was 22.9% in the first nine months of 2025 compared to 22.3% for the same period in 2024. The decrease in our effective tax rate for the third quarter was primarily due to an increase in our tax deduction from stock-based compensation accounted for as a permanent difference.The increase in our effective tax rate for the first nine months of 2025 was primarily due to an increase in foreign subsidiary income taxed in the US and a decrease in our tax deduction from stock-based compensation for the year. A significant amount of stock-based compensation vested in the first quarter of 2024, which decreased the prior year effective tax rate in comparison to 2025.
OFF-BALANCE SHEET TRANSACTIONS
We have no significant off-balance sheet transactions.
UFP INDUSTRIES, INC.
LIQUIDITY AND CAPITAL RESOURCES
The table below presents, for the periods indicated, a summary of our cash flow statement (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
||||
|
|
September 27, |
September 28, |
||||
|
|
|
2025 |
|
2024 |
||
|
Cash from operating activities |
|
$ |
399,122 |
|
$ |
497,662 |
|
Cash used in investing activities |
|
(217,211) |
|
(177,488) |
||
|
Cash used in financing activities |
|
(352,045) |
|
(245,683) |
||
|
Effect of exchange rate changes on cash |
|
2,234 |
|
(5,179) |
||
|
Net change in all cash and cash equivalents |
|
(167,900) |
|
69,312 |
||
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
1,179,594 |
|
1,122,256 |
||
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
1,011,694 |
|
$ |
1,191,568 |
In general, we fund our growth through a combination of operating cash flows, our revolving credit facility, and issuance of long-term notes payable at times when interest rates are favorable. We have not issued equity to finance growth except in the case of a large acquisition that occurred many years ago. We manage our capital structure by attempting to maintain a targeted ratio of debt to equity and debt to earnings before interest, taxes, depreciation and amortization. We believe this is one of many important factors to maintaining a strong credit profile, which in turn helps ensure timely access to capital when needed.
Seasonality has a significant impact on our working capital due to our primary selling season which occurs during the period from March to September. Consequently, our working capital typically increases during our first and second quarters resulting in negative or modest cash flows from operations during those periods. Conversely, we tend to experience a substantial decrease in working capital once we move beyond our peak selling season which typically results in significant cash flows from operations in our third and fourth quarters.
Due to the seasonality of our business and the effects of the Lumber Market, we believe our cash cycle (days of sales outstanding plus days supply of inventory less days of payables outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle increased to 64 days from 59 days during the third quarter of 2025 and increased to 61 days from 59 days during the first nine months of 2025 compared to the same periods of the prior year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
|
|
September 27, |
|
September 28, |
|
September 27, |
|
September 28, |
|
||||
|
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
||||
|
Days of sales outstanding |
|
36 |
|
36 |
|
35 |
|
35 |
|||||
|
Days supply of inventory |
|
40 |
|
36 |
|
39 |
|
36 |
|
||||
|
Days of payables outstanding |
|
(12) |
|
(13) |
|
(13) |
|
(12) |
|
||||
|
Days in cash cycle |
|
64 |
|
59 |
|
61 |
|
59 |
|
||||
The increase in our days supply of inventory for the quarter and first nine months of 2025 is due to slower inventory turns in our Retail and Packaging segments primarily due to an increase in safety stock as we planned for supply chain disruption in certain items resulting from tariffs. Our days of sales outstanding remained flat compared to the prior year. We continue to focus on past due account balances with customers, and the percentage of our accounts receivable that are current was 94% and 93% at the end of the third quarter of 2025 and 2024, respectively.
UFP INDUSTRIES, INC.
In the first nine months of 2025, our cash flows from operations were $399 million and were comprised of net earnings of $256 million and $148 million of non-cash expenses, offset by a $5 million increase in working capital since the end of December 2024 due to seasonal demand. Our cash flows from operations decreased by $99 million compared to the same period of last year primarily due to the decline in our net earnings as well as the increase in our investment in net working capital since year end, which was $19 million higher in 2025 compared to 2024. We anticipate the seasonal increase in net working capital in 2025 will be converted to cash by the end of the year.
Purchases of property, plant, and equipment of $206 million comprised most of our cash used in investing activities during the first nine months of 2025. Outstanding purchase commitments on existing capital projects totaled approximately $109 million on September 27, 2025. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, primarily in our Packaging segment and our Site-Built and Deckorators business units, to achieve efficiencies through automation in all segments, and make improvements to a number of facilities. We intend to fund capital expenditures and purchase commitments through our operating cash flows for the balance of the year. Cash used for acquisitions during the first nine months of 2025 amounted to $18 million (refer to footnote F to our condensed consolidated financial statements).
Cash flows used in financing activities during the first nine months of 2025 primarily consisted of the following:
| ● | We repurchased 2,819,901 shares of our common stock for $291 million during the first nine months of 2025 at an average price of $103.04 per share. Of this amount, 87,243 shares were repurchased in order to settle tax withholding obligations of long-term stock incentive plan participants' awards which vested in the current year. The shares were purchased at an average price of $109.83 per share, totaling $10 million. |
| ● | Dividends paid during the first nine months of 2025 were $62 million ($0.35 per share), a 6% increase from 2024. |
On September 27, 2025, we had no amount outstanding on our $750 million revolving credit facility, and we had approximately $711 million in remaining availability after considering $39 million in outstanding letters of credit under the revolving credit facility. Financial covenants on the unsecured revolving credit facility and unsecured notes include minimum interest tests and a maximum leverage ratio. The agreements also restrict the amount of additional indebtedness we may incur and the amount of assets which may be sold. We were in compliance with all our covenant requirements on September 27, 2025.
At the end of the third quarter of 2025, we had approximately $2.3 billion in total liquidity, consisting of our cash, remaining availability under our revolving credit facility, and a shelf agreement with certain lenders providing up to $575 million in remaining borrowing capacity.
ENVIRONMENTAL CONSIDERATIONS AND REGULATIONS
See Notes to Unaudited Consolidated Condensed Financial Statements, Note E, "Commitments, Contingencies, and Guarantees."
CRITICAL ACCOUNTING POLICIES
In preparing our consolidated financial statements, we follow accounting principles generally accepted in the United States. These principles require us to make certain estimates and apply judgments that affect our financial position and results of operations. We continually review our accounting policies and financial information disclosures. There have been no material changes in our policies or estimates since December 28, 2024.
UFP INDUSTRIES, INC.
FORWARD OUTLOOK
Our long-termfinancial goals include:
| ● | Growing our annual unit sales by 7 to 10 percent (including smaller tuck-in acquisitions) with at least 10 percent of all sales coming from new products; |
| ● | Achieving and sustaining a 12.5 percent EBITDA margin by continuing to enhance our capabilities and grow our portfolio and sales of value-added products, expanding geographically in our higher margin business units, and achieving operating improvements; |
| ● | Earning an incremental return on new investment over our hurdle rate; and |
| ● | Maintaining a conservative capital structure. |
We believe improvements in demand in the end markets we serve and effectively executing our strategies will allow us to achieve our long-term goals. However, in the short-term, demand in our markets has contracted due to a variety of factors, which will continue to impact our results and vary depending on the severity and duration of this cycle. As a result of these more challenging conditions, we have developed and are executing plans for reducing costs, eliminating excess capacity, divesting under-performing assets, and exiting business that does not meet our profitability targets. Our goal through these actions is to lower our cost structure and improve our operating profits by $60 million by year-end 2026. We anticipate benefits of approximately $44 million by the end of 2025, including $14 million from planned capacity reductions and approximately $30 million from planned SG&A cost reductions. The planned decreases will be partially offset by an anticipated $20 million increase in advertising costs in our Deckorators business unit to build our Surestone brand. In 2026, we believe the closure of our Bonner, MT facilities and shift of production to other facilities will increase our operating profits by approximately $16 million.
The following factors should be considered when evaluating our future prospects:
| ● | Lumber prices, which impact our cost of goods sold and selling prices, have normalized due to additional capacity added by sawmills and demand falling from peak levels. We anticipate lumber prices will remain near current levels, and experience more typical seasonal trends, until there is a substantial change in the balance of supply and demand. In the event higher duties on Canadian softwood lumber and new tariffs are enacted on imports generally, we anticipate lumber prices may increase over time. We believe we are currently in a strong position to adapt quickly to duties and tariffs without a material adverse financial impact after a short adjustment period. However, a widespread increase in tariffs may adversely impact demand in the markets we serve. |
| ● | Retail sales accounted for 40% of our net sales for the first nine months of 2025. When evaluating future demand for the segment, we analyze data such as the same-store sales growth of national home improvement retailers and forecasts of home remodeling activity. Based on this data, we currently anticipate market demand to be down low single digits for the remainder of 2025. |
| ● | Packaging sales accounted for 25% of our net sales for the first nine months of 2025. When evaluating future demand, we consider a number of metrics, including the Purchasing Managers Index (PMI), durable goods manufacturing, and U.S. real GDP. We currently believe overall demand in the markets we serve to be down low single digits for the remainder of 2025. |
| ● | Construction sales accounted for 31% of our net sales for the first nine months of 2025. |
| - | The site-built business unit accounted for approximately 11% of our net sales for the first nine months of 2025. Approximately one-third of site-built customers are multifamily builders. The industry consensus estimate of national housing starts for 2025 is 1.36 million, with estimates generally predicting flat to mid-single digit negative growth in the coming year with multi-family generally showing stronger performance compared to single-family. We anticipate demand in the regions we operate to be down mid single digits for the remainder of 2025. |
UFP INDUSTRIES, INC.
| - | The factory-built housing business unit accounted for 13% of our net sales for the first nine months of 2025. When evaluating future demand, we analyze data from production and shipments of manufactured housing. We currently believe overall demand will be flat for the remainder of 2025. |
| - | The commercial construction and concrete forming business units accounted for approximately 7% of our net sales for the first nine months of 2025. When evaluating future demand, we analyze data from non-residential construction spending. We anticipate modest growth in overall demand of these business units for the remainder of 2025. |
Capital Allocation:
We believe the strength of our cash flow generation and conservative capital structure provide us with sufficient resources to grow our business and also fund returns to our shareholders. We plan to continue to pursue a balanced and return-driven approach to capital allocation across dividends, share buybacks, capital investments and acquisitions. Specifically:
| ● | On October 23, 2025, our board approved a quarterly cash dividend of $0.35 per share, which represents a 6% year over year increase. This dividend is payable on December 15, 2025, to shareholders of record on December 1, 2025. We continue to consider our payout ratio and yield when determining the appropriate dividend rate and have a long-term objective of increasing our dividend in line with our earnings growth. |
| ● | On July 23, 2025, our board authorized the repurchase of up to $300 million worth of our shares through July 31, 2026. This share authorization supersedes and replaces our prior share repurchase authorizations. Our objective is to repurchase our stock at sufficient amounts to offset issuances under our share-based compensation plans. In addition, we will opportunistically buy shares when the price trades at pre-determined levels we believe is at a significant discount to intrinsic value. Through November 4, 2025, we have approximately $196 million of remaining availability under this authorization. |
| ● | Our targeted range for capital expenditures for 2025 is $275-$300 million, which will continue to be impacted by extended lead times required for most equipment and rolling stock as well as the time required for site selection in the case of investments in new locations. Priority continues to be given to projects that enhance the working environments of our plants, take advantage of automation opportunities, and drive strategies that have strong long-term growth potential for new and value-added products. Approximately $248 million in capital projects have been approved so far in 2025 and another $63 million are pending approval. |
| ● | We continue to pursue a healthy pipeline of acquisition opportunities of companies that are a strong strategic fit and enhance our capabilities while providing higher margin, return, and growth potential. |
UFP Industries Inc. published this content on November 05, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 05, 2025 at 17:32 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]