Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-22684
UFP INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Michigan
38-1465835
(State or other jurisdiction of incorporation or
(I.R.S. Employer Identification Number)
organization)
2801 East Beltline NE, Grand Rapids, Michigan
49525
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code (616) 364-6161
NONE
(Former name or former address, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange On Which Registered
Common Stock, $1 par value
UFPI
The Nasdaq Stock Market, LLC
Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻
Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ⌧
Accelerated Filer ◻
Non-Accelerated Filer ◻
Smaller Reporting Company ☐
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by checkmark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Class
Outstanding as of September 27, 2025
Common stock, $1 par value
58,257,224
=
TABLE OF CONTENTS
PART I.
FINANCIAL INFORMATION.
Page No.
Item 1.
Financial Statements
3
Condensed Consolidated Balance Sheets at September 27, 2025, December 28, 2024 and September 28, 2024
Condensed Consolidated Statements of Earnings and Comprehensive Income for the Three and Nine Months Ended September 27, 2025 and September 28, 2024
4
Condensed Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 27, 2025 and September 28, 2024
5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 27, 2025 and September 28, 2024
7
Notes to Unaudited Condensed Consolidated Financial Statements
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
22
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
40
Item 4.
Controls and Procedures
41
PART II.
OTHER INFORMATION
Legal Proceedings – NONE
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults upon Senior Securities – NONE
Mine Safety Disclosures – NONE
Item 5.
Other Information
42
Item 6.
Exhibits
43
2
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of United States dollars, except share data)
September 27,
December 28,
September 28,
2025
2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
1,008,632
1,171,828
1,190,807
Restricted cash
3,062
7,766
761
Investments
33,926
31,087
38,935
Accounts receivable, net
607,537
500,920
650,869
Inventories:
Raw materials
354,021
388,435
337,180
Finished goods
313,397
332,389
308,249
Total inventories
667,418
720,824
645,429
Income taxes receivable
2,571
20,588
40,883
Assets held for sale
7,230
—
Other current assets
56,708
50,012
45,841
TOTAL CURRENT ASSETS
2,387,084
2,503,025
2,613,525
DEFERRED INCOME TAXES
5,231
5,263
4,118
RESTRICTED INVESTMENTS
48,488
39,140
32,695
RIGHT OF USE ASSETS
123,369
114,721
124,065
OTHER ASSETS
106,708
98,409
98,759
GOODWILL
342,145
339,839
336,092
INDEFINITE-LIVED INTANGIBLE ASSETS
7,324
7,300
7,350
OTHER INTANGIBLE ASSETS, NET
139,305
152,498
158,199
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment
1,900,849
1,750,211
1,684,177
Less accumulated depreciation and amortization
(924,952)
(859,468)
(841,095)
PROPERTY, PLANT AND EQUIPMENT, NET
975,897
890,743
843,082
TOTAL ASSETS
4,135,551
4,150,938
4,217,885
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable
231,905
224,659
239,897
Accrued liabilities:
Compensation and benefits
183,619
193,438
216,798
Other
82,537
62,356
76,791
Current portion of lease liability
28,767
27,870
28,442
Current portion of long-term debt
5,386
4,125
44,103
TOTAL CURRENT LIABILITIES
532,214
512,448
606,031
LONG-TERM DEBT
229,007
229,830
232,043
LEASE LIABILITY
106,100
95,095
101,741
30,270
31,244
44,695
OTHER LIABILITIES
29,687
32,330
34,029
TOTAL LIABILITIES
927,278
900,947
1,018,539
TEMPORARY EQUITY:
Redeemable noncontrolling interest
5,018
5,366
5,527
SHAREHOLDERS’ EQUITY:
Controlling interest shareholders’ equity:
Preferred stock, no par value; shares authorized 1,000,000; issued and outstanding, none
Common stock, $1 par value; shares authorized 160,000,000; issued and outstanding, 58,257,224, 60,724,308 and 60,724,664
58,257
60,724
60,725
Additional paid-in capital
434,441
403,379
389,814
Retained earnings
2,689,507
2,775,280
2,728,281
Accumulated other comprehensive loss
(1,760)
(15,311)
(4,386)
Total controlling interest shareholders’ equity
3,180,445
3,224,072
3,174,434
Noncontrolling interest
22,810
20,553
19,385
TOTAL SHAREHOLDERS’ EQUITY
3,203,255
3,244,625
3,193,819
TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ EQUITY
See notes to consolidated condensed financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
AND COMPREHENSIVE INCOME
(in thousands of United States dollars, except per share data)
Three Months Ended
Nine Months Ended
NET SALES
1,559,627
1,649,383
4,990,520
5,190,308
COST OF GOODS SOLD
1,296,946
1,350,971
4,146,909
4,203,075
GROSS PROFIT
262,681
298,412
843,611
987,233
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
170,030
183,341
531,279
578,555
NET LOSS (GAIN) ON DISPOSITION AND IMPAIRMENT OF ASSETS
2,458
(453)
6,212
1,538
OTHER LOSSES (GAINS), NET
722
(4,402)
1,306
(5,643)
EARNINGS FROM OPERATIONS
89,471
119,926
304,814
412,783
INTEREST EXPENSE
2,757
2,956
8,142
9,259
INTEREST AND INVESTMENT INCOME
(12,142)
(17,217)
(34,016)
(46,925)
EQUITY IN (EARNINGS) LOSS OF INVESTEE
(278)
77
(1,072)
1,313
INTEREST AND OTHER
(9,663)
(14,184)
(26,946)
(36,353)
EARNINGS BEFORE INCOME TAXES
99,134
134,110
331,760
449,136
INCOME TAXES
23,592
32,491
75,924
100,186
NET EARNINGS
75,542
101,619
255,836
348,950
NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST
(196)
(1,819)
(1,003)
(2,429)
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST
75,346
99,800
254,833
346,521
EARNINGS PER SHARE – BASIC
1.29
1.64
4.29
5.66
EARNINGS PER SHARE – DILUTED
4.28
5.65
OTHER COMPREHENSIVE INCOME:
OTHER COMPREHENSIVE INCOME (LOSS)
507
792
15,426
(8,318)
COMPREHENSIVE INCOME
76,049
102,411
271,262
340,632
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST
(487)
(1,032)
(2,878)
397
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST
75,562
101,379
268,384
341,029
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands of United States dollars,
Controlling Interest Shareholders’ Equity
except share and per share data)
Additional
Accumulated Other
Common
Paid-In
Retained
Comprehensive
Noncontrolling
Temporary
Stock
Capital
Earnings
Loss
Interest (NCI)
Total
Equity
Balance on December 28, 2024
Net earnings (loss)
78,753
853
79,606
(183)
Foreign currency translation adjustment
2,744
(31)
2,713
(2)
Unrealized gain on debt securities
470
(355)
99
Cash dividends - $0.35 per share - quarterly
(21,322)
Issuance of 7,197 shares under employee stock purchase plan
643
650
Issuance of 232,101 shares under stock grant programs
232
3,055
101
3,388
Issuance of 80,341 shares under deferred compensation plans
81
(81)
Repurchase of 649,060 shares
(649)
(9,460)
(59,991)
(70,100)
Expense associated with share-based compensation arrangements
11,493
Accrued expense under deferred compensation plans
7,888
Balance on March 29, 2025
60,395
416,562
2,772,821
(12,097)
21,375
3,259,056
5,280
100,734
376
101,110
(239)
10,239
1,615
11,854
Unrealized loss on debt securities
(118)
(1,818)
210
Distributions to NCI
(285)
(20,656)
Issuance of 7,593 shares under employee stock purchase plan
636
644
Issuance of 26,949 shares under stock grant programs
27
17
1
45
Issuance of 10,998 shares under deferred compensation plans
10
(10)
Repurchase of 1,874,279 shares
(1,874)
(13)
(189,506)
(191,393)
8,755
1,269
Balance on June 28, 2025
58,566
425,398
2,663,394
(1,976)
23,081
3,168,463
5,253
253
75,599
(55)
(354)
471
117
(180)
570
(177)
(995)
Purchase of remaining NCI of subsidiary
Redeemable NCI
(20,512)
Issuance of 7,299 shares under employee stock purchase plan
565
572
Net forfeitures of 30,601 shares under stock grant programs
(30)
37
44
Issuance of 10,940 shares under deferred compensation plans
11
(11)
Repurchase of 296,562 shares
(297)
(22)
(28,758)
(29,077)
7,497
1,154
Balance on September 27, 2025
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY, CONTINUED
Earnings (Loss)
Balance on December 30, 2023
61,621
354,702
2,582,332
1,106
30,429
3,030,190
20,030
120,791
622
121,413
(314)
(1,419)
616
(803)
(333)
6
(3,331)
Cash dividends - $0.33 per share - quarterly
(20,411)
Issuance of 6,251 shares under employee stock purchase plan
648
654
Issuance of 369,012 shares under stock grant programs
369
5,829
6,198
Issuance of 76,927 shares under deferred compensation plans
(77)
Repurchase of 319,295 shares
(319)
(17,686)
(18,631)
(36,636)
11,194
7,621
Balance on March 30, 2024
61,754
362,231
2,664,081
(307)
28,336
3,116,095
19,383
125,930
652
126,582
(350)
(5,594)
(2,220)
(7,814)
(102)
(64)
(607)
(6,069)
(20,249)
Issuance of 8,573 shares under employee stock purchase plan
9
807
816
Issuance of 29,460 shares under stock grant programs
29
35
Issuance of 9,841 shares under deferred compensation plans
Repurchase of 883,232 shares
(883)
(99,681)
(100,564)
7,954
1,395
Balance on June 29, 2024
60,919
371,771
2,670,086
(5,965)
20,699
3,117,510
18,931
2,370
102,170
(551)
1,029
(1,236)
(207)
449
550
(390)
(2,448)
8,400
(13,302)
(20,061)
Issuance of 5,843 shares under employee stock purchase plan
646
Net forfeitures of 10,964 shares under stock grant programs
18
53
Issuance of 8,661 shares under deferred compensation plans
(8)
Repurchase of 197,417 shares
(198)
(21,562)
(21,760)
8,021
1,329
Balance on September 28, 2024
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of United States dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation
101,574
92,130
Amortization of intangibles
17,666
17,621
Expense associated with share-based and grant compensation arrangements
27,906
27,345
Deferred income taxes
(393)
(674)
Unrealized gain on investments and other
(2,195)
(3,201)
Equity in (earnings) loss of investee
Net loss on sale, disposition and impairment of assets
3,812
Impairment of goodwill and other intangibles
2,400
Gain from reduction of estimated earnout liability
(1,855)
Changes in:
Accounts receivable
(104,813)
(102,355)
Inventories
61,025
81,238
Accounts payable and cash overdraft
6,243
37,391
Accrued liabilities and other
32,988
(1,779)
NET CASH FROM OPERATING ACTIVITIES
399,122
497,662
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of property, plant and equipment
(205,504)
(165,493)
Proceeds from sale of property, plant and equipment
17,308
3,795
Acquisitions and purchases of non-controlling interest, net of cash received
(17,626)
Purchases of investments
(27,388)
(34,284)
Proceeds from sale of investments
14,464
13,782
1,535
4,712
NET CASH USED IN INVESTING ACTIVITIES
(217,211)
(177,488)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Borrowings under revolving credit facilities
23,299
20,130
Repayments under revolving credit facilities
(22,469)
(20,477)
Repayment of debt on behalf of investee
(6,303)
Contingent consideration payments and other
(221)
(4,779)
Proceeds from issuance of common stock
1,867
2,122
Dividends paid to shareholders
(62,490)
(60,721)
Distributions to noncontrolling interest
(1,280)
(11,848)
Purchase of remaining noncontrolling interest of subsidiary
(4,902)
Payments to taxing authorities in connection with shares directly withheld from employees
(9,582)
(17,838)
Repurchase of common stock
(280,987)
(141,122)
(182)
55
NET CASH USED IN FINANCING ACTIVITIES
(352,045)
(245,683)
Effect of exchange rate changes on cash
2,234
(5,179)
NET CHANGE IN CASH AND CASH EQUIVALENTS
(167,900)
69,312
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR
1,179,594
1,122,256
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD
1,011,694
1,191,568
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Cash and cash equivalents, beginning of period
1,118,329
Restricted cash, beginning of period
3,927
Cash, cash equivalents, and restricted cash, beginning of period
Cash and cash equivalents, end of period
Restricted cash, end of period
Cash, cash equivalents, and restricted cash, end of period
SUPPLEMENTAL INFORMATION:
Interest paid
8,501
9,241
Income taxes paid
58,023
112,271
NON-CASH INVESTING ACTIVITIES:
Capital expenditures included in accounts payable
1,523
1,559
NON-CASH FINANCING ACTIVITIES:
Common stock issued under deferred compensation plans
10,973
10,853
NOTES TO UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Presentation Currency
The accompanying unaudited interim condensed consolidated financial statements are presented in United States dollars (“US dollars” or “USD”), unless otherwise indicated.
Principles of Consolidation
The accompanying unaudited interim condensed consolidated condensed financial statements (the “Financial Statements”) include our accounts and those of our wholly-owned and majority-owned subsidiaries and partnerships, and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the Financial Statements do not include all the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America. All significant intercompany balances and transactions have been eliminated in consolidation.
We consolidate entities in which we have a controlling financial interest. In determining whether we have a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity (“VIE”) and whether we are the primary beneficiary. The primary beneficiary of a VIE is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. The primary beneficiary is required to consolidate the VIE. We account for unconsolidated VIEs using the equity method of accounting.
As a result of the investment in Dempsey on June 27, 2022, we own 50% of the issued equity of that entity, and the remaining 50% of the issued equity is owned by the previous owners (“Sellers”). The investment in Dempsey is an unconsolidated variable interest entity and we have accounted for it using the equity method of accounting because we do not have a controlling financial interest in the entity. The Sellers have a put right to sell their equity interest to us for $50 million and we have a call right to purchase the Seller’s equity interest for $70 million, which were both first exercisable in June 2025 and expire in June 2030. As of September 27, 2025, both the put and call rights remain unexercised and the carrying value of our investment in Dempsey is $53.4 million which is recorded in Other Assets on our condensed consolidated balance sheets. Our maximum exposure to loss consists of our investment amount and any contingent loss that may occur in the future as a result of a change in the fair value of Dempsey relative to the strike price of the put option.
In our opinion, the Financial Statements contain all material adjustments necessary to present fairly our consolidated financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. These Financial Statements should be read in conjunction with the annual consolidated financial statements, and footnotes thereto, included in our Annual Report to Shareholders on Form 10-K for the fiscal year ended December 28, 2024.
Seasonality has a significant impact on our working capital from March to August, which historically results in negative or modest cash flows from operations in our first and second quarters. Conversely, we experience a substantial decrease in working capital from September to February which typically results in significant cash flow from operations in our third and fourth quarters. For comparative purposes, we have included the September 28, 2024 balances in the accompanying unaudited condensed consolidated balance sheets.
Assets and Liabilities Held for Sale
We classify assets and related liabilities as held for sale when the following conditions are met: (i) management has committed to a plan to sell the net assets, (ii) the net assets are available for immediate sale, (iii) there is an active program to locate a buyer, (iv) the sale and transfer of the net assets is probable within one year, (v) the net assets are being actively marketed for sale at a price that is reasonable in relation to the current fair value, and (vi) it is unlikely that significant changes will be made to the plan to sell the net assets. Upon designation as held for sale, we record the assets and related liabilities at the lower of their carrying value or their estimated fair value, reduced for the costs to dispose of the assets and related liabilities, which we determined using the estimated proceeds from the sale.
During the third quarter of 2025, we determined several real estate properties and machinery and equipment within our Retail and Corporate segments met the criteria as held for sale, and therefore we have classified the related assets as held for sale on the condensed consolidated balance sheet. The fair value measurements for the assets held for sale are generally based on Level 3 inputs, which include information obtained from third-party appraisals. The assets had a carrying value of $7.2 million as of September 27, 2025, with $3.3 million of impairment charges recorded in fiscal 2025.
Recently Issued Accounting Guidance
In September 2025, the FASB issued ASU 2025-06, Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU removes all references to prescriptive and sequential software development stages. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed, and the software will be used for its intended purpose. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, using a prospective, retrospective or modified transition approach, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on the consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. This ASU provides guidance to expand disclosures related to the disaggregation of income statement expenses. Also, this ASU requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. ASU 2025-01 is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on the financial statement disclosures.
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which is intended to enhance the transparency, decision usefulness and effectiveness of income tax disclosures. The amendments in this ASU require a public entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories. A public entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also disaggregated by individual jurisdictions. The amendments also remove certain disclosures that are no longer considered cost beneficial. The amendments are effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted. Although the ASU only modifies our required income tax disclosures, we are currently evaluating the impact of adopting this guidance on the consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss to assess potential future cash flows for each reportable segment and the entity as a whole. The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures, providing new disclosure requirements for entities with a single reportable segment, and requiring other new disclosures. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We adopted this new standard in 2024. Our disclosures required by the new standard have been provided and updated retrospectively for all periods presented. Refer to Note G — Segment Reporting.
B. FAIR VALUE
We apply the provisions of ASC 820, Fair Value Measurements and Disclosures, to assets and liabilities measured at fair value. Assets measured at fair value are as follows (in thousands):
September 27, 2025
December 28, 2024
Quoted
Prices with
Prices in
Active
Observable
Unobservable
Markets
Inputs
(Level 1)
(Level 2)
(Level 3)
Money market funds
268,544
27,514
296,058
356,700
21,150
377,850
Fixed income funds
5,343
40,859
46,202
5,272
33,076
38,348
Treasury securities
345
344
Equity securities
17,988
30,500
16,431
26,000
42,431
Alternative investments
4,102
4,044
Mutual funds:
Domestic stock funds
10,592
9,534
International stock funds
796
641
Target funds
Bond funds
Alternative funds
492
477
Total mutual funds
11,897
10,668
304,117
68,373
34,602
407,092
389,415
54,226
30,044
473,685
From the assets measured at fair value as of September 27, 2025, listed in the table above, $294.1 million of money market funds are held in Cash and Cash Equivalents, $33.8 million of mutual funds, equity securities, and alternative investments are held in Investments, $30.5 million of equity securities are held in Other Assets, $0.2 million of mutual funds are held in Other Assets for our deferred compensation plan, and $46.5 million of fixed income funds and $2.0 million of money market funds are held in Restricted Investments. As of December 28, 2024, $377.4 million of money market funds were held in Cash and Cash Equivalents, $31.0 million of mutual funds, equity securities, and alternative investments were held in Investments, $26.0 million of equity securities were held in Other Assets, $0.2 million of mutual funds were held in Other Assets for our deferred compensation plan, and $38.7 million of fixed income funds and $0.4 million of money market funds were held in Restricted Investments.
We maintain money market, mutual funds, bonds, and/or equity securities in our non-qualified deferred compensation plan, our wholly owned licensed captive insurance company, and assets held in financial institutions. These funds are valued at prices quoted in an active exchange market and are included in “Cash and Cash Equivalents”, “Investments”, “Other Assets”, and “Restricted Investments”. We have elected not to apply the fair value option under ASC 825, Financial Instruments, to any of our financial instruments except for those expressly required by U.S. GAAP.
We have $30.5 million of investments through our Innov8 Fund, which is designed to invest in emerging projects, services, and technologies. These investments are valued as Level 3 assets and are categorized as “Equity securities.”
In accordance with our investment policy, our wholly-owned captive, Ardellis Insurance Ltd. (“Ardellis”), maintains an investment portfolio, totaling $80.5 million and $69.8 million as of September 27, 2025 and December 28, 2024, respectively, which has been included in the aforementioned table of total investments. This portfolio consists of domestic and international equity securities, alternative investments, and fixed income bonds.
Ardellis’ available for sale investment portfolio, including funds held with the State of Michigan, consists of the following (in thousands):
Unrealized
Cost
Gain (Loss)
Fair Value
Fixed income
46,320
39,645
(1,297)
13,563
4,425
13,161
3,270
Mutual funds
8,714
3,123
11,837
8,549
2,064
10,613
3,407
695
3,321
723
72,349
8,125
80,474
65,020
4,760
69,780
Our fixed income investments consist of a blend of US Government and Agency bonds and investment grade corporate bonds with varying maturities. Our equity investments consist of small, mid, and large cap growth and value funds, as well as international equity. Our mutual fund investments consist of domestic and international stock. Our alternative investments consist of a private real estate income trust which is valued as a Level 3 asset. The net pre-tax unrealized gain of the portfolio was $8.1 million and $4.8 million as of September 27, 2025 and December 28, 2024, respectively. Carrying amounts above are recorded in the Investments and Restricted Investments line items within the balance sheet as of September 27, 2025 and December 28, 2024.
C. REVENUE RECOGNITION
Within the three primary segments, UFP Retail Solutions (“Retail”), UFP Packaging (“Packaging”) and UFP Construction (“Construction”), that the Company operates, there are a variety of written agreements governing the sale of our products and services. The transaction price is stated at the purchase order level, which includes shipping and/or freight costs and any applicable governmental authority taxes. The majority of our contracts have a single performance obligation concentrated around the delivery of goods to the carrier, Free On Board (FOB) shipping point. Therefore, revenue is recognized when this performance obligation is satisfied. Generally, title and control passes at the time of shipment. In certain circumstances, the customer takes title when the shipment arrives at the destination. However, our shipping process is typically completed the same day.
Certain customer products that we provide require installation by the Company or a third party. Installation revenue is recognized upon completion. If we use a third party for installation, the party will act as an agent to us until completion of the installation. Installation revenue represents an immaterial share of our total net sales.
We utilize rebates, credits, discounts and/or cash-based incentives with certain customers which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration. The allocation of these costs are applied at the invoice level and recognized in conjunction with revenue. Additionally, returns and refunds are estimated on a historical and expected basis which is a reduction of revenue recognized.
Earnings on construction contracts are reflected in operations using over time accounting, under either cost to cost or units of delivery methods, depending on the nature of the business at individual operations, which is in accordance with ASC 606 as revenue is recognized when certain performance obligations are performed. Under over time accounting using the cost to cost method, revenues and related earnings on construction contracts are measured by the relationships of actual costs incurred relative to the total estimated costs. Under over time accounting using the units of delivery method, revenues and related earnings on construction contracts are measured by the relationships of actual units produced relative to the total number of units. Revisions in earnings estimates on the construction contracts are recorded in the accounting period in which the basis for such revisions becomes known. Projected losses on individual contracts are charged to operations in their entirety when such losses become apparent.
Our construction contracts are generally entered into with a fixed price, and completion of the projects can range from 6 to 18 months in duration. Therefore, our operating results are impacted by, among many other things, labor rates and commodity costs. During the year, we update our estimated costs to complete our projects using current labor and commodity costs and recognize losses to the extent that they exist.
The following table presents our net sales disaggregated by revenue source (in thousands):
% Change
Point in Time Revenue
1,528,506
1,607,411
(4.9)%
4,911,049
5,069,509
(3.1)%
Over Time Revenue
31,121
41,972
(25.9)%
79,471
120,799
(34.2)%
Total Net Sales
(5.4)%
(3.8)%
The Construction segment comprises the construction contract revenue shown above. Construction contract revenue is primarily made up of site-built and framing customers.
The following table presents the balances of over time accounting accounts which are included in “Other current assets” and “Accrued liabilities: Other”, respectively (in thousands):
Cost and Earnings in Excess of Billings
4,730
7,478
8,097
Billings in Excess of Cost and Earnings
5,214
6,483
8,692
12
D. EARNINGS PER SHARE
The computation of earnings per share (“EPS”) is as follows (in thousands):
Numerator:
Net earnings attributable to controlling interest
Adjustment for earnings allocated to non-vested restricted common stock equivalents
(2,830)
(3,825)
(9,521)
(13,489)
Net earnings for calculating EPS
72,516
95,975
245,312
333,032
Denominator:
Weighted average shares outstanding
58,642
61,023
59,668
61,540
Adjustment for non-vested restricted common stock equivalents
(2,414)
(2,610)
(2,447)
(2,669)
Shares for calculating basic EPS
56,228
58,413
57,221
58,871
Effect of dilutive restricted common stock equivalents
122
134
106
109
Shares for calculating diluted EPS
56,350
58,547
57,327
58,980
Net earnings per share:
Basic
Diluted
E. COMMITMENTS, CONTINGENCIES, AND GUARANTEES
We are self-insured for environmental impairment liability, including certain liabilities which are insured through a wholly owned subsidiary, Ardellis Insurance Ltd., a licensed captive insurance company.
In addition, on September 27, 2025, we were parties either as plaintiff or defendant to a number of lawsuits and claims arising through the normal course of our business. In the opinion of management, our consolidated financial statements will not be materially affected by the outcome of these contingencies and claims.
On September 27, 2025, we had outstanding purchase commitments on commenced capital projects of approximately $109 million.
We provide a variety of warranties for products we manufacture. Historically, warranty claims have not been material. We also distribute products manufactured by other companies. While we do not warrant these products, we have received claims as a distributor of these products when the manufacturer no longer exists or has the ability to pay. Historically, these costs have not had a material effect on our consolidated financial statements.
As part of our operations, we supply building materials and labor to site-built construction projects or we jointly bid on contracts with framing companies for such projects. In some instances, we are required to post payment and performance bonds to ensure the products and installation services are completed in accordance with our contractual obligations. We have agreed to indemnify the surety for claims properly made against these bonds. As of September 27, 2025, we had approximately $24.9 million in outstanding payment and performance bonds for open projects. We had approximately $11.2 million in payment and performance bonds outstanding for completed projects which are still under warranty.
On September 27, 2025, we had outstanding letters of credit totaling $40.4 million, primarily related to certain insurance contracts, industrial development revenue bonds, and other debt agreements described further below.
13
In lieu of cash deposits, we provide irrevocable letters of credit in favor of our insurers and other third parties to guarantee our performance under certain insurance contracts and other legal agreements. As of September 27, 2025, we have irrevocable letters of credit outstanding totaling approximately $37.1 million for these types of arrangements. We have reserves recorded on our balance sheet, in accrued liabilities, that reflect our expected future liabilities under those insurance arrangements.
We are required to provide irrevocable letters of credit in favor of the bond trustees for all industrial development revenue bonds that have been issued. These letters of credit guarantee principal and interest payments to the bondholders. We currently have irrevocable letters of credit outstanding totaling approximately $3.3 million related to our outstanding industrial development revenue bonds. These letters of credit have varying terms but may be renewed at the option of the issuing banks.
Certain wholly owned domestic subsidiaries have guaranteed the indebtedness of UFP Industries, Inc. in certain debt agreements, including the Series 2018 and 2020 Senior Notes and our revolving credit facility. The maximum exposure of these guarantees is limited to the indebtedness outstanding under these debt arrangements and this exposure will expire concurrent with the expiration of the debt agreements.
We did not enter into any new guarantee arrangements during the third quarter of 2025 which would require us to recognize a liability on our balance sheet.
F. BUSINESS COMBINATIONS
We completed the following acquisitions since the end of September 2024, which were accounted for using the purchase method. Dollars below are in thousands unless otherwise noted:
Net
Company
Acquisition
Intangible
Tangible
Operating
Name
Date
Purchase Price
Assets
Segment
National Supply, LLC (NS)
July 14, 2025
$6,531consideration for 100% asset purchase
3,045
3,486
Construction
Located in Elkhart, IN, NS is a material supplier in the RV industry.
RWP West, LLC (RWP)
June 16, 2025
$7,360consideration for 100% asset purchase
7,283
Located in Twin Falls, ID and established in 2007, RWP serves the western portion of the US and is a manufacturer and distributor for the manufactured housing, RV, and cargo markets.
C&L Wood Products (C&L)
December 23, 2024
$29,901consideration for 100% asset purchase
12,662
17,239
Packaging
Located in Hartselle, AL and founded in 1975, C&L is a manufacturer of machine-built pallets, mulch, and other wood products.
The estimated fair values of assets acquired and liabilities assumed are based on available information at the acquisition date and assumptions deemed reasonable by management, supplemented by the expertise of third-party valuation specialists engaged to assist in determining fair value for intangible assets, including goodwill. As of September 27, 2025, the fair value determination of the intangible assets for the above business combinations has not been finalized. Therefore, changes in facts and circumstances may result in adjustments to the initial fair value estimates during the measurement period, which may not exceed one year from the acquisition date.
The business combinations mentioned above contributed approximately $23.8 million to net sales and a $1.2 million operating loss during the first nine months of 2025. They are not significant to our operating results and thus proforma results for 2025 and 2024 are not presented.
14
G. SEGMENT REPORTING
ASC 280, Segment Reporting (“ASC 280”), defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is the chief executive officer, as he has the ultimate decision-making authority related to assessing the Company’s performance and allocating resources. The CODM assesses performance for our segments and decides how to allocate resources based on net sales, cost of goods sold, earnings from operations and net earnings. These metrics are also reported on the Consolidated Statement of Earnings and Comprehensive Income. The measure of segment assets is reported on the Consolidated Balance Sheet as total consolidated assets. The CODM uses earnings from operations and net earnings to evaluate income generated from segment assets (return on investment) in determining wage increase allocations and bonus pools, and in deciding whether to reinvest profits into the business, such as for acquisitions, or to pay dividends.
We operate manufacturing, treating and distribution facilities internationally, but primarily in the United States. Our business segments consist of UFP Retail Solutions, UFP Packaging and UFP Construction and align with the end markets we serve. This segment structure allows for a specialized and consistent sales approach among Company operations, 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. In the case of locations that serve multiple segments, results are allocated and accounted for by segment.
The exception to this market-centered reporting and management structure is our International segment, which comprises our packaging operations in Mexico, Canada, Spain, India, United Arab Emirates and Australia and sales and buying offices in other parts of the world, and our Ardellis segment, which represents our wholly owned fully licensed captive insurance company based in Bermuda. Our International and Ardellis segments do not meet the quantitative thresholds in order to be separately reported and accordingly, the International and Ardellis segments have been aggregated in the “All Other” segment for reporting purposes.
“Corporate” includes purchasing, transportation, corporate ventures, and administrative functions that serve our operating segments. Operating results of Corporate primarily consist of net sales to external customers initiated by UFP Transportation, Inc., which owns, leases and operates transportation equipment, UFP Purchasing, Inc. and over (under) allocated costs. The operating results of UFP Real Estate, Inc., which owns and leases real estate, are also included in the Corporate column. Inter-company lease and service charges are assessed to our operating segments for the use of these assets and services at fair market value rates. Total assets in the Corporate column include unallocated cash and cash equivalents, certain prepaid assets, and certain property, equipment and other assets pertaining to the centralized activities of Corporate, UFP Real Estate, Inc., UFP Transportation, Inc., and UFP Purchasing, Inc. Real estate activities are conducted by the real estate company on behalf of the segments, and capital expenditures associated with real estate are allocated to the segments.
15
The tables below are presented in thousands:
Three Months Ended September 27, 2025
All
Retail
Corporate
Net sales to outside customers
593,985
394,949
496,465
72,482
1,746
Intersegment net sales
59,118
27,472
20,622
82,334
(189,546)
Cost of goods sold
513,763
327,528
405,262
59,251
(8,858)
Gross Profit
80,222
67,421
91,203
13,231
10,604
Selling, general, administrative expenses
49,032
45,831
58,943
9,226
6,998
Net loss (gain) on disposition and impairment of assets
9,983
(5,970)
(59)
63
(1,559)
Other losses (gains), net
462
(3)
203
60
Earnings from operations
20,745
27,560
32,322
3,739
5,105
Interest expense
30
(212)
2,936
Interest and investment income
(100)
(4)
(7)
(2,735)
(9,296)
(380)
102
Interest and other
(70)
(381)
(2,845)
(6,360)
Earnings before income taxes
20,815
27,941
32,329
6,584
11,465
Income taxes
5,074
6,583
7,647
1,691
2,597
15,741
21,358
24,682
4,893
8,868
Other significant items:
Amortization expense
879
2,139
775
1,701
427
5,921
Depreciation expense
7,523
8,946
6,667
1,027
10,470
34,633
Segment assets
881,513
772,184
630,054
338,211
1,513,589
Capital expenditures
37,278
11,155
6,149
744
20,426
75,752
Three Months Ended September 28, 2024
635,571
401,626
534,625
75,802
1,759
60,393
23,791
18,293
67,906
(170,383)
542,516
330,381
422,967
61,350
(6,243)
93,055
71,245
111,658
14,452
8,002
54,113
49,352
69,046
13,696
(2,866)
Net (gain) loss on disposition and impairment of assets
(9)
28
(404)
Other (gains) losses, net
(2,861)
276
(1,787)
41,812
21,865
42,400
2,547
11,302
(886)
3,809
(143)
(3,147)
(13,927)
Equity in loss of investee
(114)
(4,033)
(10,118)
41,926
21,784
6,580
21,420
10,157
5,277
10,273
1,594
5,190
31,769
16,507
32,127
4,986
16,230
998
2,216
703
1,536
433
5,886
7,238
8,664
6,027
832
8,726
31,487
843,299
786,988
660,815
341,860
1,584,923
15,155
17,332
15,358
2,973
8,090
58,908
16
Nine Months Ended September 27, 2025
1,989,592
1,233,626
1,563,995
197,806
5,501
199,760
77,016
71,860
273,361
(621,997)
1,714,335
1,026,049
1,281,803
160,706
(35,984)
275,257
207,577
282,192
37,100
41,485
163,029
136,748
185,454
28,086
17,962
11,090
(4,713)
272
2,679
(3,116)
780
268
451
(193)
100,358
96,198
5,884
26,832
89
(742)
8,786
(273)
(5,343)
(28,388)
Equity in earnings of investee
(853)
(219)
(184)
(848)
(6,304)
(19,602)
100,542
76,390
96,206
12,188
46,434
23,010
17,482
22,017
2,779
10,636
77,532
74,189
9,409
35,798
2,793
6,484
2,181
4,973
1,235
22,425
26,933
19,188
3,080
29,948
91,804
57,704
22,813
2,168
31,015
205,504
Nine Months Ended September 28, 2024
2,073,403
1,261,248
1,627,068
224,219
4,370
189,841
70,992
57,125
219,218
(537,176)
1,752,464
1,020,877
1,275,520
171,916
(17,702)
320,939
240,371
351,548
52,303
22,072
175,014
156,289
211,503
41,663
(5,914)
877
1,455
222
(1,026)
(2,527)
70
(3,286)
100
147,575
82,627
139,753
13,916
28,912
87
(2,552)
11,712
(473)
(25)
(6,274)
(40,142)
(386)
1,314
(8,826)
(28,430)
147,961
81,313
139,778
22,742
57,342
33,193
17,841
31,194
5,072
12,886
114,768
63,472
108,584
17,670
44,456
2,994
6,624
2,108
4,573
1,322
21,327
25,600
17,032
2,449
25,722
43,289
45,602
48,718
4,836
23,048
165,493
The following table presents goodwill by segment as of September 27, 2025, and December 28, 2024 (in thousands):
All Other
Balance as of December 28, 2024
84,116
146,747
87,401
21,575
2025 Purchase Accounting Adjustments
773
Foreign Exchange, Net
153
1,338
1,533
Balance as of September 27, 2025
84,158
146,759
88,315
22,913
The following table presents our disaggregated net sales (in thousands) by business unit for each segment for the three and nine months ended September 27, 2025, and September 28, 2024 (in thousands).
ProWood
512,822
556,638
1,743,521
1,816,167
Deckorators
81,163
76,572
244,769
250,413
2,361
1,302
6,823
Total Retail
Structural Packaging
245,868
256,959
769,151
811,211
PalletOne
126,573
126,007
402,706
395,408
Protective Packaging
22,508
18,660
61,769
54,629
Total Packaging
Factory Built
201,596
201,831
648,484
618,907
Site Built
168,069
219,626
561,099
679,732
Commercial
78,227
69,528
212,462
197,259
Concrete Forming
48,573
43,640
141,950
131,170
Total Construction
H. 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.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are continuing to evaluate the impact of OBBBA beyond 2025; however, any effects are expected to relate primarily to deferred tax items and are not anticipated to materially impact our effective tax rate.
19
I. COMMON STOCK
Below is a summary of common stock issuances for the first nine months of 2025 and 2024 (in thousands, except average share price):
Share Issuance Activity
Common Stock
Average Share Price
Shares issued under the employee stock purchase plan
99.41
Shares issued under the employee stock gift program
106.38
Shares issued under the director compensation plan
56.22
Shares issued under the LTSIP
179
106.65
Shares issued under the executive stock match plan
109.84
Forfeitures
(52)
Total shares issued under stock grant programs
229
100.21
Shares issued under the deferred compensation plans
107.29
During the first nine months of 2025, we repurchased 2,819,901 shares of our common stock at an average share price of $103.04.
September 28, 2024
21
120.78
118.48
Shares issued under the director retainer stock program
118.24
352
113.49
Shares issued under the executive stock grants plan
64
111.35
388
113.17
95
113.73
During the first nine months of 2024, we repurchased approximately 1,399,944 shares of our common stock at an average share price of $113.55.
J. INVENTORIES
Inventories are stated at the lower of cost or net realizable value. The cost of inventories includes raw materials, direct labor, and manufacturing overhead and is determined using the weighted average cost method. Raw materials consist primarily of unfinished wood products and other materials expected to be manufactured or treated prior to sale, while finished goods represent various manufactured and treated wood products ready for sale.
We write down the value of inventory, the impact of which is reflected in cost of goods sold in the Condensed Consolidated Statements of Earnings and Comprehensive Income, if the cost of specific inventory items on hand exceeds the amount we expect to realize from the ultimate sale or disposal of the inventory. These estimates are based on management's judgment regarding future demand and market conditions and analysis of historical experience.
20
K. SUBSEQUENT EVENTS
Subsequent to our reporting date, we repurchased 894,428 shares for $81.6 million, resulting in an average share price of $91.22.
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:
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:
Random Lengths Composite
Average $/MBF
January
434
398
February
442
389
March
479
416
April
485
403
May
453
377
June
431
382
July
426
363
August
386
September
384
Third quarter average
414
Year-to-date average
441
390
Third quarter percentage change
8.4
%
Year-to-date percentage change
13.1
23
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.
Random Lengths SYP
380
401
371
424
394
446
445
353
381
355
351
333
347
320
337
339
338
360
0.3
8.1
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.
24
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:
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.
Period 1
Period 2
Lumber cost
300
400
Conversion cost
50
= Product cost
350
450
Adder
= Sell price
500
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.
25
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.
Net sales
100.0
83.2
81.9
83.1
81.0
Gross profit
16.8
18.1
16.9
19.0
Selling, general, and administrative expenses
10.9
11.1
10.6
0.2
0.1
(0.3)
(0.1)
5.7
7.3
6.1
8.0
(0.6)
(0.9)
(0.5)
(0.7)
6.4
6.6
8.7
1.5
2.0
1.9
4.8
6.2
5.1
6.7
Less net earnings attributable to noncontrolling interest
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.
Percentage Change
Units sold
(4.0)
(3.0)
(2.0)
(12.0)
(18.1)
(14.5)
(12.1)
(7.3)
(6.3)
(8.2)
(2.8)
(25.4)
(28.3)
(26.2)
(21.0)
26
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.
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).
The following tables present the components of our operating results, for the periods indicated, as a percentage of net sales by segment.
N/A
86.5
82.9
81.6
81.7
13.5
17.1
18.4
18.3
8.3
11.6
11.9
12.7
1.7
(1.5)
3.5
7.0
6.5
5.2
85.4
82.3
79.1
80.9
14.6
17.7
20.9
19.1
8.5
12.3
12.9
(2.4)
5.4
7.9
3.4
86.2
82.0
81.2
13.8
18.0
18.8
8.2
14.2
0.6
(0.4)
5.0
3.0
84.5
78.4
76.7
15.5
21.6
23.3
12.4
13.0
18.6
7.1
8.6
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:
Third Quarter 2025 versus Third Quarter 2024
in Sales
in Selling Prices
in Units
Acquisition Unit Change
Organic Unit Change
(6.5)
(6.0)
(1.7)
1.0
(7.1)
(5.1)
(4.4)
(1.0)
Total Sales
(5.4)
(1.4)
Year-to-Date 2025 versus Year-to-Date 2024
(5.0)
(2.2)
(3.9)
(4.9)
(11.8)
1.2
(13.0)
25.9
26.0
(3.8)
(0.8)
The following table presents, for the periods indicated, our percentage of value-added and commodity-based sales to total sales by our segments:
Value-Added
Commodity-Based
52.6
47.4
53.4
46.6
75.4
24.6
76.1
23.9
81.8
18.2
73.3
26.7
74.6
25.4
82.4
17.6
49.3
50.7
68.5
31.5
68.8
31.2
52.2
47.8
53.1
46.9
75.1
24.9
75.6
24.4
80.8
19.2
80.4
19.6
75.3
24.7
75.9
24.1
68.3
31.7
55.9
44.1
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.
31
The table below presents new product sales in thousands:
New Product Sales by Segment
% of Segment
Net Sales
55,277
9.3
43,638
6.9
43,523
11.0
45,497
11.3
(4.3)
18,592
3.7
15,128
2.8
22.9
164
(69.5)
766
43.9
704
40.0
8.8
Total New Product Sales
118,208
7.6
105,131
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.
170,487
148,153
15.1
133,555
10.8
142,841
53,845
56,844
(5.3)
296
573
(48.3)
2,091
38.0
1,875
42.9
11.5
360,274
7.2
350,286
2.9
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.
32
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:
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:
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.
33
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:
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.
34
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:
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:
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.
The corporate segment consists of over (under) allocated costs that are not significant.
OFF-BALANCE SHEET TRANSACTIONS
We have no significant off-balance sheet transactions.
36
LIQUIDITY AND CAPITAL RESOURCES
The table below presents, for the periods indicated, a summary of our cash flow statement (in thousands):
Cash from operating activities
Cash used in investing activities
Cash used in financing activities
Net change in all cash and cash equivalents
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.
Days of sales outstanding
Days supply of inventory
39
Days of payables outstanding
(12)
Days in cash cycle
59
61
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.
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:
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.
38
FORWARD OUTLOOK
Our long-term financial goals include:
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:
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:
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
We are exposed to market risks related to fluctuations in interest rates on our variable rate debt, which consists of a revolving credit facility and industrial development revenue bonds. We do not currently enter into any material interest rate swaps, futures contracts or options on futures, or other types of derivative financial instruments to mitigate this risk.
For fixed rate debt, changes in interest rates generally affect the fair market value, but not earnings or cash flows. Conversely, for variable rate debt, changes in interest rates generally do not influence fair market value, but do affect future earnings and cash flows. We do not have an obligation to prepay fixed rate debt prior to maturity, and as a result, interest rate risk and changes in fair market value should not have a significant impact on such debt until we are required to refinance it.
We are subject to fluctuations in the price of lumber. We experience significant fluctuations in the cost of commodity lumber products from primary producers (the “Lumber Market”). A variety of factors over which we have no control, including government regulations, tariffs and trade policies, transportation, environmental regulations, weather conditions, economic conditions, and natural disasters, impact the cost of lumber products and our selling prices. While we attempt to minimize our risk from severe price fluctuations, substantial, prolonged trends in lumber prices can affect our sales volume, our gross margins, and our profitability. We anticipate that these fluctuations will continue in the future. (See “Impact of the Lumber Market on Our Operating Results.”)
Our international operations have exposure to foreign currency rate risks, primarily due to fluctuations in their local currency, which is their functional currency, compared to the U.S. Dollar. Additionally, certain of our operations enter into transactions that will be settled in a currency other than the U.S. Dollar. We may enter into forward foreign exchange rate contracts in the future to mitigate foreign currency exchange risk. Historically, our hedge contracts have been immaterial to the financial statements.
Item 4. Controls and Procedures.
PART II. OTHER INFORMATION
Item 1A. Risk Factors.
There have been no material changes to the risk factors disclosed in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 28, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
We maintain a Director Compensation Plan (the “Plan”) pursuant to which non-employee directors can elect to (1) receive shares of our common stock, on a deferred basis, in lieu of all or a portion of the annual retainer payable to the director in cash (which deferred cash is used to purchase our common stock on a deferred basis at the rate of 110% of the deferred cash amount), and/or (2) defer receipt of all or a portion of the annual retainer payable to the director in the form of our common stock. Any shares of common stock issuable to a director on a deferred basis pursuant to the Plan are not actually issued until the deferred payment date specified pursuant to the Plan, which is typically after a director’s retirement from the Board. However, on the date such shares are deemed earned by the director, we issue deferred stock units (“DSUs”) to a bookkeeping account for each director to represent the shares issuable in the future pursuant to the Plan. Directors who have DSUs credited to their account pursuant to the Plan receive additional DSUs credited to their account whenever a dividend is paid on the Company’s common stock.
On August 1, 2025, the Company issued 1,038 shares of its common stock to non-employee directors as part of the annual retainer payable to directors in stock (i.e., shares that were issued on a current basis and not deferred pursuant to the Plan). The Company issued all shares described in this paragraph pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933 due to the fact that the issuance of the shares was made on a private basis pursuant to the Plan.
Fiscal Month
(1)
June 29 - August 2, 2025
171,562
99.78
289,995,223
August 3 - 30, 2025
August 31 - September 27, 2025
125,000
95.66
278,038,203
Note: July includes 216 shares tendered by certain employees of the Company (and repurchased by the Company) in order to satisfy their respective tax withholding obligations resulting from the vesting of restricted stock awards. The Company treats these share repurchases against its board-approved share repurchase authorizations described below.
A total of 71,346 shares reported as repurchased between June 29, 2025 and July 22, 2025 in the table above were repurchased pursuant to the share repurchase authorization approved by our board on July 24, 2024 and announced July 30, 2024, which authorized the purchase of up to $200 million of outstanding stock through July 31, 2025. This share repurchase authorization was subsequently increased by the board on April 23, 2025, from $200 million to $300 million worth of outstanding stock. The balance of the shares reported in the table above were purchased pursuant to the new share repurchase authorization approved by our board and announced on July 23, 2025, which authorizes the repurchase of up to $300 million worth of our shares through July 31, 2026, and supersedes and replaces all prior authorizations.
Item 5. Other Information.
During the quarter ended September 27, 2025, no director or officer adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6. Exhibits.
The following exhibits (listed by number corresponding to the Exhibit Table as Item 601 in Regulation S-K) are filed with this report:
Certifications.
(a)
Certificate of the Chief Executive Officer of UFP Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
(b)
Certificate of the Chief Financial Officer of UFP Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
Certificate of the Chief Executive Officer of UFP Industries, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
Certificate of the Chief Financial Officer of UFP Industries, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
Interactive Data File formatted in iXBRL (Inline eXtensible Business Reporting Language).
(INS)
iXBRL Instance Document.
(SCH)
iXBRL Schema Document.
(CAL)
iXBRL Taxonomy Extension Calculation Linkbase Document.
(LAB)
iXBRL Taxonomy Extension Label Linkbase Document.
(PRE)
iXBRL Taxonomy Extension Presentation Linkbase Document.
(DEF)
iXBRL Taxonomy Extension Definition Linkbase Document.
104
Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document).
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 5, 2025
By:
/s/ William D. Schwartz, Jr.
William D. Schwartz, Jr.,
Chief Executive Officer and
Principal Executive Officer
/s/ Michael R. Cole
Michael R. Cole,
Chief Financial Officer,
Principal Financial Officer and
Principal Accounting Officer