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 March 28, 2026
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 March 28, 2026
Common stock, $1 par value
56,480,230
=
TABLE OF CONTENTS
PART I.
FINANCIAL INFORMATION.
Page No.
Item 1.
Financial Statements
3
Condensed Consolidated Balance Sheets at March 28, 2026, December 27, 2025 and March 29, 2025
Condensed Consolidated Statements of Earnings and Comprehensive Income for the Three Months Ended March 28, 2026 and March 29, 2025
4
Condensed Consolidated Statements of Shareholders’ Equity for the Three Months Ended March 28, 2026 and March 29, 2025
5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 28, 2026 and March 29, 2025
6
Notes to Unaudited Condensed Consolidated Financial Statements
7
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
19
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
34
Item 4.
Controls and Procedures
PART II.
OTHER INFORMATION
Legal Proceedings – NONE
Item 1A.
Risk Factors
35
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults upon Senior Securities – NONE
Mine Safety Disclosures – NONE
Item 5.
Other Information
36
Item 6.
Exhibits
37
2
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of United States dollars, except share data)
March 28,
December 27,
March 29,
2026
2025
Assets
Current assets
Cash and cash equivalents
$
714,453
914,199
903,562
Restricted cash
13,952
10,872
1,061
Investments
40,104
34,374
30,725
Accounts receivable, net
647,770
475,959
712,990
Inventories:
Raw materials
374,690
380,206
388,413
Finished goods
392,441
341,814
366,500
Total inventories
767,131
722,020
754,913
Income taxes receivable
19,570
38,373
1,819
Assets held for sale
2,516
6,340
—
Other current assets
64,244
66,515
59,321
Total current assets
2,269,740
2,268,652
2,464,391
Deferred income taxes
9,924
8,025
4,796
Restricted investments
51,303
50,540
42,038
Right of use assets
117,809
115,790
116,457
Other assets
98,696
102,433
103,658
Goodwill
343,843
343,921
340,255
Indefinite-lived intangible assets
7,350
7,336
7,307
Other intangible assets, net
127,582
133,616
148,359
Property, plant and equipment:
Property, plant and equipment
1,976,998
1,936,470
1,810,735
Less accumulated depreciation and amortization
(971,431)
(943,890)
(887,710)
Property, plant and equipment, net
1,005,567
992,580
923,025
Total assets
4,031,814
4,022,893
4,150,286
Liabilities, temporary equity and shareholders’ equity
Current liabilities
Accounts payable
255,982
205,932
277,690
Accrued compensation and benefits
123,391
188,354
123,587
Other accrued liabilities
75,906
71,039
63,113
Current portion of lease liability
27,616
27,997
28,051
Current portion of long-term debt
6,027
899
4,085
Total current liabilities
488,922
494,221
496,526
Long-term debt and finance lease obligations
228,310
228,859
229,936
Lease liability
100,970
99,085
96,218
83,396
83,205
30,682
Other liabilities
29,040
28,816
32,588
Total liabilities
930,638
934,186
885,950
Temporary Equity
Redeemable noncontrolling interest
485
4,463
5,280
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 240,000,000; issued and outstanding, 56,480,230, 56,591,900 and 60,394,887
56,480
56,592
60,395
Additional paid-in capital
461,153
444,828
416,562
Retained earnings
2,561,230
2,559,375
2,772,821
Accumulated other comprehensive income (loss)
726
1,564
(12,097)
Total controlling interest shareholders’ equity
3,079,589
3,062,359
3,237,681
Noncontrolling interest
21,102
21,885
21,375
Total shareholders’ equity
3,100,691
3,084,244
3,259,056
Total liabilities, temporary equity and shareholders’ equity
See notes to unaudited interim condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
AND COMPREHENSIVE INCOME
(in thousands of United States dollars, except per share data)
Three Months Ended
Net sales
1,461,267
1,595,519
Cost of sales
1,225,378
1,327,323
Gross profit
235,889
268,196
Operating expenses
Selling, general and administrative expenses
172,883
176,254
Net gain on disposition and impairments of assets
(1,652)
(76)
Other losses (gains), net
577
(234)
Total operating expenses
171,808
175,944
Earnings from operations
64,081
92,252
Interest and other
Interest expense
2,623
2,669
Interest and investment income
(5,433)
(11,117)
Equity in (earnings) loss of investee
(53)
Total interest and other
(2,863)
(8,429)
Earnings before income taxes
66,944
100,681
Income taxes
15,847
21,258
Net earnings
51,097
79,423
Less net earnings attributable to noncontrolling interest
(323)
(670)
Net earnings attributable to controlling interest
50,774
78,753
Earnings per share - basic
0.90
1.30
Earnings per share - diluted
0.89
Other comprehensive income:
Other comprehensive (loss) income
(903)
3,181
Comprehensive income
50,194
82,604
Less comprehensive income attributable to noncontrolling interest
(258)
(637)
Comprehensive income attributable to controlling interest
49,936
81,967
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 27, 2025
305
51,079
18
Foreign currency translation adjustment
(1,220)
(6)
(1,226)
(59)
Unrealized gain on debt securities
382
Distributions to NCI
(1,082)
Purchase of remaining NCI of subsidiary
(3,937)
Other
(167)
Cash dividends - $0.36 per share - quarterly
(20,456)
Issuance of 7,575 shares under employee stock purchase plan
8
570
578
Issuance of 144,425 shares under stock grant programs
144
1,896
38
2,078
Issuance of 70,871 shares under deferred compensation plans
71
(71)
Repurchase of 334,541 shares
(335)
(1,193)
(28,501)
(30,029)
Expense associated with share-based compensation arrangements
8,409
Accrued expense under deferred compensation plans
6,881
Balance on March 28, 2026
Earnings (Loss)
Balance on December 28, 2024
60,724
403,379
2,775,280
(15,311)
20,553
3,244,625
5,366
Net earnings (loss)
853
79,606
(183)
2,744
(31)
2,713
(2)
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)
11,493
7,888
Balance on March 29, 2025
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of United States dollars)
Cash flows used in operating activities:
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation
35,085
32,941
Amortization of intangibles
5,370
5,817
Expense associated with share-based and grant compensation arrangements
8,472
11,561
(1,822)
(17)
Unrealized (gain) loss on investments and other
(921)
672
Impairment of investments
4,000
Net gain on sale, disposition and impairment of assets
Gain from reduction of estimated earnout liability
(344)
Changes in:
Accounts receivable
(172,087)
(211,709)
Inventories
(45,312)
(33,830)
Accounts payable and cash overdraft
45,358
52,902
Accrued liabilities and other
(31,154)
(46,166)
Net cash used in operating activities
(103,619)
(108,807)
Cash flows used in investing activities:
Capital expenditures
(48,265)
(67,268)
Proceeds from sale of property, plant and equipment
6,110
758
Acquisitions and purchases of noncontrolling interest, net of cash received
(3,735)
Purchases of investments
(7,836)
(7,191)
Proceeds from sale of investments
2,470
2,304
(307)
(418)
Net cash used in investing activities
(47,828)
(75,550)
Cash flows used in financing activities:
Borrowings under revolving credit facilities
10,968
4,798
Repayments under revolving credit facilities
(6,175)
(4,752)
Contingent consideration payments and other
(83)
(221)
Proceeds from issuance of common stock
Dividends paid to shareholders
Distributions to noncontrolling interest
Purchase of remaining noncontrolling interest of subsidiary
Payments to taxing authorities in connection with shares directly withheld from employees
(1,205)
(9,547)
Repurchase of common stock
(23,993)
(60,553)
26
21
Net cash used in financing activities
(45,360)
(90,926)
Effect of exchange rate changes on cash
141
312
Net change in cash and cash equivalents
(196,666)
(274,971)
Cash, cash equivalents, and restricted cash, beginning of period
925,071
1,179,594
Cash, cash equivalents, and restricted cash, end of period
728,405
904,623
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents, beginning of period
1,171,828
Restricted cash, beginning of period
7,766
Cash and cash equivalents, end of period
Restricted cash, end of period
Supplemental information:
Interest paid
3,002
3,038
Income taxes (refunded) paid
(1,176)
2,496
Non-cash investing activities:
Capital expenditures included in accounts payable
1,695
1,770
Non-cash financing activities:
Common stock issued under deferred compensation plans
7,731
8,823
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 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. Per the contracts, 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 March 28, 2026, the carrying value of our investment in Dempsey is $52.0 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 27, 2025.
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 March 29, 2025 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 first quarter of 2026, machinery and equipment within our Retail segment 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 $2.5 million as of March 28, 2026, with $3.3 million of impairment charges recorded in fiscal 2025. No additional impairment charges were recorded during the first quarter of 2026. We have recognized $1.3 million of gains on the sale of real estate that were previously classified as assets held for sale during the year. The gains were included in net gain on disposition and impairments of assets on the consolidated statements of earnings and comprehensive income.
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.
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):
March 28, 2026
December 27, 2025
Quoted
Prices with
Prices in
Active
Observable
Unobservable
Markets
Inputs
(Level 1)
(Level 2)
(Level 3)
Money market funds
76,143
32,983
109,126
182,051
26,450
208,501
Fixed income funds
5,361
49,823
55,184
5,365
44,227
49,592
Treasury securities
346
345
Equity securities
19,350
24,734
44,084
18,492
28,000
46,492
Alternative investments
4,280
4,186
Mutual funds:
Domestic stock funds
10,138
10,436
International stock funds
836
816
Target funds
11
Bond funds
Alternative funds
501
490
Total mutual funds
11,492
11,759
112,692
82,806
29,014
224,512
218,012
70,677
32,186
320,875
From the assets measured at fair value as of March 28, 2026, listed in the table above, $108.3 million of money market funds are held in Cash and cash equivalents, $35.0 million of mutual funds, equity securities, and alternative investments are held in Investments, $24.7 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 $55.5 million of fixed income funds and $0.8 million of money market funds are held in Restricted investments. As of December 27, 2025, $207.9 million of money market funds were held in Cash and cash equivalents, $34.3 million of mutual funds, equity securities, and alternative investments were held in Investments, $28.0 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 $49.9 million of fixed income funds and $0.6 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 $24.7 and $28.0 million of investments through our Innov8 Fund as of March 28, 2026 and December 27, 2025, respectively, 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.” We evaluate these investments quarterly, including a qualitative assessment for indicators of impairment in accordance with ASC 321-10-35-3. During the first quarter of 2026, we concluded that one investment was fully impaired, resulting in a $4.0 million loss.
9
In accordance with our investment policy, our wholly-owned captive, Ardellis Insurance Ltd. (“Ardellis”), maintains an investment portfolio, totaling $90.5 million and $84.3 million as of March 28, 2026 and December 27, 2025, 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
54,527
617
55,144
49,342
209
49,551
14,409
4,941
14,028
4,464
Mutual funds
8,545
2,883
11,428
3,152
11,697
3,465
815
3,436
750
81,292
9,256
90,548
75,696
8,575
84,271
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 $9.3 million and $8.6 million as of March 28, 2026 and December 27, 2025, respectively. Carrying amounts above are recorded in the Investments and Restricted investments line items within the balance sheet as of March 28, 2026 and December 27, 2025.
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.
10
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
1,427,167
1,549,304
(7.9)%
Over Time Revenue
34,100
46,215
(26.2)%
Total Net Sales
(8.4)%
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 account balances associated with over time revenue which are included in Other current assets and Other accrued liabilities, respectively (in thousands):
Cost and Earnings in Excess of Billings
6,866
4,979
8,242
Billings in Excess of Cost and Earnings
5,556
3,961
4,488
D. EARNINGS PER SHARE
The computation of earnings per share (“EPS”) is as follows (in thousands):
Numerator:
Adjustment for earnings allocated to non-vested restricted common stock equivalents
(1,989)
(2,975)
Net earnings for calculating EPS
48,785
75,778
Denominator:
Weighted average shares outstanding
56,836
60,900
Adjustment for non-vested restricted common stock equivalents
(2,379)
(2,523)
Shares for calculating basic EPS
54,457
58,377
Effect of dilutive restricted common stock equivalents
72
83
Shares for calculating diluted EPS
54,529
58,460
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.
On March 28, 2026, 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 March 28, 2026, we had outstanding purchase commitments on commenced capital projects of approximately $108 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 March 28, 2026, we had approximately $54.2 million in outstanding payment and performance bonds for open projects. We had approximately $6.0 million in payment and performance bonds outstanding for completed projects which are still under warranty.
On March 28, 2026, we had outstanding letters of credit totaling $40.6 million, primarily related to certain insurance contracts, industrial development revenue bonds, and other debt agreements described further below.
12
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 March 28, 2026, 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 first quarter of 2026 which would require us to recognize a liability on our balance sheet.
F. BUSINESS COMBINATIONS
We completed the following acquisitions during the first three months of 2026 and during fiscal 2025, which were accounted for using the purchase method (in thousands):
Net
Company
Acquisition
Intangible
Tangible
Operating
Name
Date
Purchase Price
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
77
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.
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 March 28, 2026, 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 $5.9 million to net sales and $0.3 million operating income during the first three months of 2026. They are not significant to our operating results and thus proforma results for 2026 and 2025 are not presented.
13
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 Retail, Packaging and 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, 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 over (under) allocated costs and net sales to external customers initiated by UFP Purchasing, which manages supplier relationships and purchases lumber and other materials, UFP Transportation, which owns, leases, and operates transportation equipment, and UFP Real Estate, which owns and leases real estate. 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 segment 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.
14
The tables below are presented in thousands:
Three Months Ended March 28, 2026
All
Retail
Packaging
Corporate
Net sales to outside customers
531,176
394,093
465,513
68,505
1,980
Intersegment net sales
71,066
26,151
18,740
57,449
(173,406)
Cost of goods sold
450,614
333,745
387,896
56,782
(3,659)
Gross Profit
80,562
60,348
77,617
11,723
5,639
Selling, general, administrative expenses
56,046
45,203
61,826
8,978
830
Net loss (gain) on disposition and impairment of assets
68
(170)
1
(1,564)
55
423
106
(7)
24,393
15,315
15,355
2,638
6,380
31
(278)
2,868
(101)
(3)
(1,451)
(3,878)
(91)
(70)
40
(1,820)
(1,010)
24,463
15,275
15,358
4,458
7,390
5,791
3,616
3,635
904
1,901
18,672
11,659
3,554
5,489
Other significant items:
Amortization expense
2,103
675
1,640
116
Depreciation expense
7,757
8,316
6,774
1,010
11,228
Segment assets
1,030,002
782,613
649,184
333,828
1,236,187
28,072
11,375
6,305
1,237
1,276
48,265
Three Months Ended March 29, 2025
607,383
410,008
515,940
60,298
1,890
64,645
23,714
26,561
90,484
(205,404)
526,088
340,434
425,140
49,666
(14,005)
81,295
69,574
90,800
10,632
15,895
55,355
47,769
62,784
8,462
1,884
24
32
120
(252)
Other (gains) losses, net
(218)
80
(54)
(42)
26,134
21,773
27,816
2,224
14,305
30
(333)
2,969
(90)
(1)
(308)
(10,718)
Equity in loss (earnings) of investee
325
(306)
(60)
328
(947)
(7,749)
26,194
21,445
27,817
3,171
22,054
5,531
4,528
5,873
669
4,657
20,663
16,917
21,944
2,502
17,397
957
2,179
702
1,601
378
7,310
8,897
6,191
944
9,599
995,830
812,033
659,478
341,947
1,340,998
32,308
25,260
6,428
614
2,658
67,268
15
The following table presents goodwill by segment as of March 28, 2026, and December 27, 2025 (in thousands):
All Other
Balance as of December 27, 2025
84,174
148,104
88,397
23,246
2026 Acquisitions
2026 Purchase Accounting Adjustments
Foreign Exchange, Net
(55)
(22)
(78)
Balance as of March 28, 2026
84,173
88,342
23,224
The following table presents our disaggregated net sales by business unit for each segment for the three months ended March 28, 2026, and March 29, 2025 (in thousands):
ProWood
440,748
514,278
Deckorators
68,670
65,612
UFP Edge
21,758
27,493
Total Retail
Structural Packaging
249,293
PalletOne
124,186
134,219
Protective Packaging
20,614
19,807
Total Packaging
Factory Built
193,384
217,219
Site-Built
150,870
190,617
Commercial
73,243
63,720
Concrete Forming
48,016
44,384
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 23.7% in the first quarter of 2026 compared to 21.1% in the same period of 2025. The increase in our effective tax rate for the first quarter was primarily due to a decrease in our tax deduction from stock-based compensation accounted for as a permanent difference.
16
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. Provisions taking effect in 2026 that we anticipate will impact our effective tax rate include establishing a floor for the deductibility of charitable contributions and modifications to the deduction for qualified export sales (FDDEI). However, these changes are not expected to have a material impact on our rate.
I. COMMON STOCK
Below is a summary of common stock issuances for the first three months of 2026 and 2025 (in thousands, except average share price):
Share Issuance Activity
Common Stock
Average Share Price
Shares issued under the employee stock purchase plan
89.68
Shares issued under the employee stock gift program
102.44
Shares issued under the director compensation plan
104.90
Shares issued under the LTSIP
121
110.39
Shares issued under the executive stock match program
110.55
Forfeitures
(5)
Total shares issued under stock grant programs
110.34
Shares issued under the deferred compensation plan
109.08
During the first three months of 2026, we repurchased 334,541 shares of our common stock at an average share price of $89.76.
March 29, 2025
106.31
114.30
Shares issued under the director retainer stock program
115.32
179
106.65
60
109.84
(9)
107.49
109.82
During the first three months of 2025, we repurchased approximately 649,060 shares of our common stock at an average share price of $108.00.
17
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.
K. SUBSEQUENT EVENTS
Subsequent to our reporting date, we repurchased 254,885 shares for $22.7 million, resulting in an average share price of $89.01.
On April 6, 2026, Deckorators, a wholly owned subsidiary, closed on its agreement to purchase the net operating assets of MoistureShield, Inc. for $55.6 million. MoistureShield, based in Springdale, Arkansas, is a leading manufacturer of wood plastic composite decking.
On May 4, 2026, UFP Packaging, LLC, a wholly owned subsidiary, closed on its agreement to purchase the net operating assets of John Rock, Inc. for $48.0 million. John Rock, based in Coatesville, Pennsylvania, is a leading manufacturer of new pallets and crates.
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. We are headquartered in Grand Rapids, Michigan. 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.
Importantly, our structure allows us to evaluate market conditions and opportunities, while effectively allocating capital and resources to the appropriate segments and business units. We believe that the diversification and manner in which we operate our business segments provides an inherent hedge against the inevitable business cycles that our markets experience and over which we have little control. Accordingly, our goal is to provide stable earnings and cash flows to our shareholders. Our diversification and operating practices also mitigate the impact of volatile lumber market conditions experienced by traditional lumber companies.
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; artificial intelligence; 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 first quarter of 2026 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
400
434
February
436
442
March
443
479
First quarter average
426
452
First quarter percentage change
(5.8)
%
20
In addition, a Southern Yellow Pine (“SYP”) composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately 73% of our total lumber purchases.
Random Lengths SYP
392
386
415
401
422
424
410
404
1.5
Finally, a Spruce Pine Fir (“SPF”) composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately 12% of our total lumber purchases.
Random Lengths SPF
430
480
457
464
526
450
495
(9.1)
Lumber prices in 2026 remain lower due to overall weak demand in the end markets that primarily consume softwood lumber – new housing, housing repair and remodel activity, and industrial (including packaging). Recent sequential increases are primarily due to recent mill capacity curtailments as they attempt to better align supply with demand. Weak overall demand has been impacted by a variety of factors, including higher inflation and interest rates as well as lower consumer sentiment and greater economic uncertainty.
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 43.3% and 43.8% of our sales in the first three months of 2026 and 2025, 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.
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
Conversion cost
50
= Product cost
350
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.
22
IMPACT OF TARIFFS ON OUR OPERATING RESULTS
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 March 28, 2026, 82% of our lumber purchases are from domestic suppliers, 10% are imported from Canada, and 8% are imported from other international suppliers.
In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”), which the U.S. administration relied on to impose certain tariffs, does not authorize the administration to impose tariffs. As a result of this ruling, the U.S. Court of International Trade (“CIT”) issued an order directing the U.S. Customs and Border Protection (“CBP”) agency to begin formalizing a process for refunds. The CBP recently opened an online portal allowing importers of record to submit refund requests related to tariffs issued under the IEEPA. The Company has submitted refund requests for tariffs paid to CBP under the IEEPA totaling approximately $20 million, and the request has been acknowledged by the CBP. Acknowledgment of a request by CBP does not indicate approval of the request or that a refund will be paid, and we have not accrued any receivable relating to these potential refunds. It is anticipated that the administration will file appeals or take other action with respect to orders issued by CIT concerning the refund process. As a result, there is uncertainty as to the timing and extent of refund payments.
IMPACT OF HIGHER TRANSPORTATION COSTS ON OUR OPERATING RESULTS
Recent geopolitical events have contributed to an increase in our costs across the enterprise, primarily related to fuel and transportation. In the first quarter of 2026, we estimate that we absorbed an additional $3 million of these costs which adversely impacted our profitability in March. These costs continued to increase in April. We are taking actions intended to recover these costs through pricing to our customers. However, there are factors beyond our control, including contract terms and market conditions, that may impact our ability to be successful in these efforts. Please see “Risk Factors” below for more information.
BUSINESS COMBINATIONS AND ASSET PURCHASES
We did not complete any business combinations in the first quarter of 2026 and completed two in fiscal 2025. The annual historical sales attributable to these acquisitions are approximately $24 million in aggregate. These business combinations are not significant to our quarterly results and thus proforma results for 2026 and 2025 are not presented.
See Notes to the Unaudited Interim Condensed Consolidated Financial Statements, Note F, “Business Combinations” for additional information.
23
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.
100.0
83.9
83.2
16.1
16.8
Selling, general, and administrative expenses
11.8
11.0
Net gain on disposition and impairment of assets
(0.1)
4.4
5.8
(0.2)
(0.5)
4.6
6.3
1.1
1.3
3.5
5.0
3.4
4.9
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
(7.0)
(2.0)
(12.0)
17.8
(1.9)
(8.2)
(30.5)
(31.1)
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 weak consumer demand and selling at lower prices, which has reduced our gross profits.
SG&A as percentage of gross profit
73.3%
65.7%
Operating Results by Segment:
Our business segments consist of Retail, Packaging and Construction, and align with the end markets we serve. Among other advantages, this structure allows for a 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 and net sales to external customers initiated by UFP Purchasing, which manages supplier relationships and purchases lumber and other materials, UFP Transportation, which owns, leases and operates transportation equipment, and UFP Real Estate, which owns and leases real estate. 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.
The following tables present our operating results, for the periods indicated, by segment (in thousands).
25
The following tables present the components of our operating results, for the periods indicated, as a percentage of net sales by segment.
N/A
84.8
84.7
83.3
82.9
15.2
15.3
16.7
17.1
10.6
11.5
13.3
13.1
0.1
0.2
3.9
3.3
86.6
83.0
82.4
13.4
17.0
17.6
9.1
11.7
12.2
14.0
4.3
5.3
5.4
3.7
NET SALES
We design, manufacture and market wood and wood-alternative products, primarily used to enhance outdoor living environments; for national home centers and other retailers; for engineered wood components, structural lumber, and other products for factory-built and site-built residential and commercial construction; customized interior fixtures used in a variety of retail stores, commercial, and other structures; and structural wood packaging, components and packing materials for various industries. Our strategic long-term sales objectives include:
First Quarter 2026 versus First Quarter 2025
in Sales
in Selling Prices
in Units
Acquisition Unit Change
Organic Unit Change
(12.5)
0.5
(13.0)
(3.9)
1.0
(3.0)
(9.8)
(4.8)
(5.0)
13.6
(2.4)
16.0
4.8
Total Sales
(8.4)
(1.4)
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
50.9
49.1
51.4
48.6
75.3
24.7
75.2
24.8
79.8
20.2
72.7
27.3
75.6
24.4
85.3
14.7
55.0
45.0
68.6
31.4
67.4
32.6
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.
27
Our overall unit sales of value-added products were down 6% in the first quarter of 2026 compared to the prior year. Our overall unit sales of commodity-based products decreased approximately 12% in the first quarter of 2026 compared to the prior year.
The table below presents new product sales in thousands:
New Product Sales by Segment
% of Segment
Net Sales
47,408
8.9
44,410
7.3
6.8
48,451
12.3
39,959
9.7
21.3
17,243
11,422
2.2
51.0
221
0.3
193
14.5
525
26.5
417
22.1
25.9
Total New Product Sales
113,848
7.8
96,401
6.0
18.1
Note: Certain prior year product reclassifications and the change in designation of certain products as "new" resulted in a change in prior year's sales.
Retail Segment
Net sales in the first quarter of 2026 decreased by 12% compared to the same period of 2025 due to a 13% decrease in units and a 1% increase in selling prices. Our unit sales to big box customers, which we believe are more closely correlated with repair and remodel activity, decreased approximately 15%, while unit sales to independent retailers, which we believe are more closely correlated to new housing starts, decreased approximately 8%. The 15% decline in ProWood volume is primarily due to unfavorable winter weather across the Midwest and Northeast, the absence of storm-related demand which carried over from the fall of 2024 into early 2025, the loss of low margin commodity sales which commenced in the second quarter of 2025, and generally weaker consumer sentiment. UFP Edge unit sales declined 20% due to the closure of the Bonner, MT facilities at the end of 2025 and rationalizing product portfolio to those that can achieve profitability targets. Deckorators’ unit sales increased 2% compared to the same period of 2025. Within that business unit, sales of wood-plastic composite decking and Surestone™ mineral-based composite decking increased 27% and 4% from the prior year, respectively. The increases were offset by railings, which declined 6% from the prior year.
Gross profits decreased by $1 million, or 1% to $81 million for the first quarter of 2026 compared to the same period last year. The change in gross profit was attributable to the following:
28
SG&A increased by $1 million, or 1%, in the first quarter of 2026 compared to the same period of 2025 primarily due to an increase in advertising costs related to our efforts to build brand awareness of our Deckorators Surestone™ decking. Accrued bonus expense, which varies primarily with the overall profitability and return on investment of the segment, remained flat from the first quarter of 2025 and totaled $9 million for the quarter.
Earnings from operations decreased in the first quarter of 2026 compared to 2025 by $2 million, or 7%, as a result of the factors mentioned above.
Packaging Segment
Net sales in the first quarter of 2026 decreased 4% compared to the same period of 2025, due to a 3% decrease in organic unit sales, and a 2% decrease in pricing, partially offset by an acquired business by PalletOne that contributed 1% to unit growth. Organic unit changes consist of an 11% decrease in PalletOne, partially offset by a 5% increase in Protective Packaging, while Structural Packaging remained flat.
Gross profits decreased by $9 million, or 13%, for the first quarter of 2026 compared to the same period last year. The change in gross profit was attributable to the following:
SG&A decreased by approximately $3 million, or 5%, in the first quarter of 2026 compared to the same period of 2025. Accrued bonus expense decreased approximately $2 million relative to the same period of 2025 and totaled $6 million for the quarter. We also achieved $2 million of savings from our cost reduction efforts. These reductions were offset by a $1 million increase in healthcare costs.
Earnings from operations decreased in the first quarter of 2026 compared to 2025 by $7 million, or 30%, due to the factors discussed above.
Construction Segment
Net sales in the first quarter of 2026 decreased 10% compared to the same period of 2025 due to a 5% decrease in selling prices resulting from competitive price pressure in our Site-Built business unit, and a 5% decrease in unit sales. We experienced a unit sales decrease in Site-Built of 14%, due to weaker demand for housing, and a unit sales decrease of 7% in Factory Built, primarily due to lost market of certain low margin commodity products. These decreases were partially offset by 14% unit growth in Concrete Forming and 15% unit growth in Commercial. As of March 28, 2026 and March 29, 2025, we estimate that our backlog of orders in our site-built housing business unit were $80 million and $65 million, respectively.
Gross profits decreased by $13 million, or 15%, in the first quarter of 2026 compared to the same period of 2025. The change in our gross profit was comprised of the following:
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SG&A decreased by approximately $1 million, or 2%, in the first quarter of 2026 compared to the same period of 2025. Accrued bonus expense decreased by $4 million and totaled $6 million for the quarter. This decrease was partially offset by an increase in legal fees and settlements of $2 million and an increase in healthcare costs of $1 million.
Earnings from operations decreased in the first quarter of 2026 compared to 2025 by $13 million, or 45%, 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 and net sales to external customers initiated by UFP Purchasing, UFP Transportation, and UFP Real Estate. In 2026, we modified our cost allocation methods to more closely approximate actual.
INCOME TAXES
OFF-BALANCE SHEET TRANSACTIONS
We have no significant off-balance sheet transactions.
LIQUIDITY AND CAPITAL RESOURCES
The table below presents, for the periods indicated, a summary of our cash flow statement (in thousands):
Cash used in 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 68 days from 62 days during the first quarter of 2026 compared to the same period of the prior year.
Days of sales outstanding
Days supply of inventory
46
41
Days of payables outstanding
(13)
Days in cash cycle
62
The increase in our days supply of inventory for the first quarter of 2026 is due to slower inventory turns in our Retail segment due to an increase in safety stock and as we work to normalize inventory as a result of weaker than anticipated demand in the first quarter of 2026. We continue to focus on past due account balances with customers, and the percentage of our accounts receivable that are current was 95% and 94% at the end of the first quarter of 2026 and 2025, respectively.
In the first three months of 2026, our cash flows used in operations were $104 million and were comprised of net earnings of $51 million and $48 million of non-cash expenses, offset by a $203 million increase in working capital since the end of December 2025 due to seasonal demand. Our cash flows used in operations decreased by $5 million compared to the same period of the prior year primarily due to the increase in our investment in net working capital since year end, which was $36 million lower in 2026 compared to 2025, partially offset by a $31 million decline in our net earnings and non-cash expenses. We anticipate the seasonal increase in net working capital in 2026 will be converted to cash by early in the fourth quarter.
Purchases of property, plant, and equipment of $48 million comprised most of our cash used in investing activities during the first three months of 2026. Outstanding purchase commitments on existing capital projects totaled approximately $108 million on March 28, 2026. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, primarily in our Packaging segment and our Deckorators business unit, 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 flows used in financing activities during the first three months of 2026 primarily consisted of the following:
On March 28, 2026, 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 March 28, 2026.
At the end of the first quarter of 2026, we had approximately $2.0 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 Interim Condensed Consolidated 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 27, 2025.
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 macro-economic and geopolitical 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 to reduce or eliminate capacity at locations that are not meeting our profitability targets and reduce our SG&A costs. At the beginning of 2025, we announced that our goal through these actions was to improve our operating profits by $60 million by the end of 2026. We are on track to deliver the remaining $25 million or more from this cost out program by year end. Additionally, we anticipate:
The following factors should be considered when evaluating our future sales and gross profits:
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.
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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 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, cost of materials, and gross profits. (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.
Other than the risk factor noted below, 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 27, 2025.
Our business is exposed to risks related to the current and potential future conflicts in the Middle East. Current and potential future developments related to the conflicts in the Middle East have had, and could continue to have, a broader impact on the global markets in which we do business. These conflicts have contributed to an increase in our costs across the enterprise, primarily related to fuel and transportation. In the first quarter of 2026, we estimate that we absorbed an additional $3 million of these costs which adversely impacted our profitability in March. These costs continued to increase in April. We are taking actions intended to recover these costs through pricing to our customers. However, there are factors beyond our control, including contract terms and market conditions, that may impact our ability to be successful in these efforts. If elevated fuel and transportation costs persist, increase further, or cannot be passed through to customers in a timely manner (or at all), our margins and operating results could be adversely affected. In addition, geopolitical events may disrupt logistics networks and carrier capacity, increase lead times, or reduce service levels, which could adversely affect our ability to meet customer requirements and could result in higher costs, lost sales, or penalties under certain customer arrangements.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Director Compensation Plan
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 February 2, 2026, the Company issued 966 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.
Deferred Compensation Plan
We maintain a Deferred Compensation Plan (the “DCP”) which allows key employees to defer a portion of their salary and/or cash incentive compensation. Participants in the DCP may elect to invest the deferred amounts in certain investment alternatives, including our common stock. Also, under the DCP, if a key employee’s ownership of our common stock is below certain targeted thresholds, the amount of deferral must be used to invest in shares of our common stock. All amounts deferred to the DCP that are invested in our common stock are invested at a price per share representing a 15% discount to the prevailing market price of our stock. In general, each employee receives a payout of his or her DCP account one year from the date he or she terminates employment with the Company, unless termination of employment is due to retirement, death or change in control, in which case the employee or his or her beneficiary may receive the distribution earlier, subject to DCP provisions. The Company issued all shares described in this paragraph pursuant to an exemption 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 DCP. On February 19, 2026, we issued a total of 61,748 shares to employees who elected to defer a portion of their annual incentive bonus into our common stock. In addition, shares were issued on the respective employees’ last payroll dates in each month. During the first quarter of 2026 we issued 9,123 shares to employees who elected to defer a portion of their salaries into our common stock, which were as follows:
Common stock
Date issued
shares issued
January 29, 2026
39
January 30, 2026
2,872
February 26, 2026
February 27, 2026
2,896
March 26, 2026
45
3,233
Total common stock shares issued
9,123
Fiscal Month
(4)
December 28, 2025 - January 31, 2026
125,989,005
February 1 - February 28, 2026
6,208
98.10
125,379,976
March 1 - 28, 2026
328,333
89.60
95,960,979
Note: February and March include 11,946 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.
On and effective as of July 23, 2025, our board authorized the repurchase of up to $300 million worth of shares of our common stock through the period ending July 31, 2026, which supersedes and replaces prior authorizations.
Item 5. Other Information.
During the quarter ended March 28, 2026, 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.
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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: May 6, 2026
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