CONDENSED CONSOLIDATED ~~CONDENSED~~ BALANCE SHEETS

(Unaudited)

~~(Unaudited)~~

(in thousands, except share data)

September 30,

December 31,

September 24,


2017

2016

2016

ASSETS





CURRENT ASSETS:





Cash and cash equivalents

$
22,044

$
34,091

$
36,683

Restricted cash

905

398


909

Investments

10,781

10,348


10,453

Accounts receivable, net

419,183

282,253


343,771

Inventories:





Raw materials

203,930

198,954


180,740

Finished goods

208,556

198,273


189,188

Total inventories

412,486

397,227


369,928

Refundable income taxes

763

11,459


7,407

Other current assets

22,438

20,662


21,636

TOTAL CURRENT ASSETS

888,600

756,438

790,787

DEFERRED INCOME TAXES

1,899

1,546


2,416

RESTRICTED INVESTMENTS

7,982

—


—

OTHER ASSETS

7,634

8,617


8,757

GOODWILL

212,029

198,535


207,832

INDEFINITE-LIVED INTANGIBLE ASSETS

7,580

2,340


2,340

OTHER INTANGIBLE ASSETS, NET

36,093

26,731


14,014

PROPERTY, PLANT AND EQUIPMENT:





  Property, plant and equipment

754,175

699,462

717,287

Less accumulated depreciation and amortization

(429,066)

(401,611)


(432,796)

       PROPERTY, PLANT AND EQUIPMENT, NET

325,109

297,851

284,491

TOTAL ASSETS

1,486,926

1,292,058

1,310,637

LIABILITIES AND SHAREHOLDERS’ EQUITY





CURRENT LIABILITIES:





Cash overdraft

$
26,617

$
19,761

$
13,940

Accounts payable

171,774

124,660


137,979

Accrued liabilities:





Compensation and benefits

88,185

92,441


99,549

Other

50,179

32,281


57,104

Current portion of long-term debt

2,197

2,634


1,584

TOTAL CURRENT LIABILITIES

338,952

271,777


310,156

LONG-TERM DEBT

145,884

109,059


110,362

DEFERRED INCOME TAXES

22,806

20,817


14,066

OTHER LIABILITIES

29,204

29,939


28,963

TOTAL LIABILITIES

536,846

431,592


463,547

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 80,000,000; issued and outstanding, 20,391,399, 20,342,069 and 20,330,939

20,391

20,342


20,331

Additional paid-in capital

200,778

185,333


183,962

Retained earnings

715,497

649,135


637,536

Accumulated other comprehensive income

(871)

(5,630)


(4,854)

Total controlling interest shareholders’ equity

935,795

849,180


836,975

Noncontrolling interest

14,285

11,286


10,115

TOTAL SHAREHOLDERS’ EQUITY

950,080

860,466


847,090

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$
1,486,926

$
1,292,058

$
1,310,637


(in thousands, except share data)
	June 25,		December 25,		June 26,
	2022		2021		2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	138,071	$	286,662	$	44,286
Restricted cash		729		4,561		629
Investments		35,475		36,495		33,827
Accounts receivable, net		1,046,543		737,805		980,571
Inventories:
Raw materials		490,923		416,043		540,289
Finished goods		615,379		547,277		486,199
Total inventories		1,106,302		963,320		1,026,488
Refundable income taxes		13,083		4,806		—
Other current assets		36,241		39,827		36,699
TOTAL CURRENT ASSETS		2,376,444		2,073,476		2,122,500
DEFERRED INCOME TAXES		3,568		3,462		2,362
RESTRICTED INVESTMENTS		19,885		19,310		18,896
RIGHT OF USE ASSETS		107,825		96,703		97,597
OTHER ASSETS		32,186		31,876		29,631
GOODWILL		320,532		315,038		318,108
INDEFINITE-LIVED INTANGIBLE ASSETS		7,350		7,369		7,401
OTHER INTANGIBLE ASSETS, NET		117,869		109,017		98,601
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment		1,286,037		1,212,113		1,120,381
Less accumulated depreciation and amortization		(660,873)		(623,093)		(587,194)
PROPERTY, PLANT AND EQUIPMENT, NET		625,164		589,020		533,187
TOTAL ASSETS		3,610,823		3,245,271		3,228,283
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Cash overdraft	$	11,926	$	17,030	$	34,229
Accounts payable		386,833		319,125		359,484
Accrued liabilities:
Compensation and benefits		252,723		289,196		213,655
Income taxes		—		—		11,188
Other		107,112		84,853		90,153
Current portion of lease liability		24,903		23,155		22,511
Current portion of long-term debt		40,496		42,683		97
TOTAL CURRENT LIABILITIES		823,993		776,042		731,317
LONG-TERM DEBT		276,315		277,567		571,856
LEASE LIABILITY		86,464		76,632		78,564
DEFERRED INCOME TAXES		63,389		60,964		34,983
OTHER LIABILITIES		35,594		37,497		52,000
TOTAL LIABILITIES		1,285,755		1,228,702		1,468,720
SHAREHOLDERS’ EQUITY:
Controlling interest shareholders’ equity:
Preferred stock, 0 par value; shares authorized 1,000,000; issued and outstanding, NaN	$	—	$	—	$	—
Common stock, $1 par value; shares authorized 80,000,000; issued and outstanding, 61,622,527, 61,901,851 and 61,850,733		61,623		61,902		61,851
Additional paid-in capital		275,061		243,995		235,309
Retained earnings		1,950,922		1,678,121		1,440,833
Accumulated other comprehensive loss		(7,458)		(5,405)		(1,464)
Total controlling interest shareholders’ equity		2,280,148		1,978,613		1,736,529
Noncontrolling interest		44,920		37,956		23,034
TOTAL SHAREHOLDERS’ EQUITY		2,325,068		2,016,569		1,759,563
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	3,610,823	$	3,245,271	$	3,228,283

See notes to consolidated condensed financial ~~statements.~~statements.

Table of Contents

UFP INDUSTRIES, INC.


(in thousands, except share and per share data)
	Controlling Interest Shareholders’ Equity
							Accumulated
			Additional				Other
	Common		Paid-In		Retained		Comprehensive		Noncontrolling
	Stock		Capital		Earnings		Earnings		Interest		Total
Balance on December 27, 2020	$	61,206	$	218,224	$	1,182,680	$	(1,794)	$	22,836	$	1,483,152
Net earnings						103,311				940		104,251
Foreign currency translation adjustment								(374)		(526)		(900)
Unrealized loss on debt securities								(1,296)				(1,296)
Distributions to noncontrolling interest										(2,914)		(2,914)
Cash dividends - $0.15 per share - quarterly						(9,274)						(9,274)
Issuance of 5,816 shares under employee stock purchase plan		6		357								363
Net issuance of 536,970 shares under stock grant programs		537		3,888		5						4,430
Issuance of 89,690 shares under deferred compensation plans		89		(89)								—
Expense associated with share-based compensation arrangements				2,936								2,936
Accrued expense under deferred compensation plans				5,795								5,795
Balance on March 27, 2021	$	61,838	$	231,111	$	1,276,722	$	(3,464)	$	20,336	$	1,586,543
Net earnings						173,382				1,978		175,360
Foreign currency translation adjustment								1,759		720		2,479
Unrealized gain on debt securities								241				241
Distributions to noncontrolling interest												—
Additional purchase of noncontrolling interest												—
Cash dividends - $0.15 per share - quarterly						(9,276)						(9,276)
Issuance of 9,282 shares under employee stock plans		9		564								573
Net forfeitures of 5,718 shares under stock grant programs		(6)		(224)		5						(225)
Issuance of 8,913 shares under deferred compensation plans		10		(10)								—
Expense associated with share-based compensation arrangements				2,728								2,728
Accrued expense under deferred compensation plans				1,140								1,140
Balance on June 26, 2021	$	61,851	$	235,309	$	1,440,833	$	(1,464)	$	23,034	$	1,759,563

See notes to consolidated condensed financial statements.

Table of Contents

~~UNIVERSAL FOREST PRODUCTS,~~UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED ~~CONDENSED~~ STATEMENTS OF CASH FLOWS

(Unaudited)


(in thousands)	Six Months Ended
	June 25,		June 26,
	2022		2021
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net earnings	$	400,984	$	279,611
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation		44,034		38,342
Amortization of intangibles		8,740		7,193
Expense associated with share-based and grant compensation arrangements		12,542		5,742
Deferred income taxes		179		177
Unrealized loss (gain) on investments and other		6,181		(2,784)
Equity in earnings of investee		1,532		1,465
Net loss (gain) on sale and disposition of assets		766		(1,577)
Changes in:
Accounts receivable		(304,715)		(336,094)
Inventories		(134,653)		(329,577)
Accounts payable and cash overdraft		56,120		143,018
Accrued liabilities and other		(1,313)		78,751
NET CASH FROM (USED IN) OPERATING ACTIVITIES		90,397		(115,733)
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(71,675)		(79,028)
Proceeds from sale of property, plant and equipment		2,029		6,673
Acquisitions and purchases of non-controlling interest, net of cash received		(39,343)		(433,239)
Purchases of investments		(15,166)		(14,581)
Proceeds from sale of investments		8,221		6,885
Other		(2,829)		(708)
NET CASH USED IN INVESTING ACTIVITIES		(118,763)		(513,998)
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		570,700		849,944
Repayments under revolving credit facilities		(571,075)		(589,695)
Repayments of debt		(2,485)		—
Contingent consideration payments and other		(2,553)		(1,464)
Proceeds from issuance of common stock		1,457		936
Dividends paid to shareholders		(28,015)		(18,550)
Distributions to noncontrolling interest		(2,053)		(2,914)
Repurchase of common stock		(90,805)		—
Other		(184)		(331)
NET CASH (USED IN) FROM FINANCING ACTIVITIES		(125,013)		237,926
Effect of exchange rate changes on cash		956		112
NET CHANGE IN CASH AND CASH EQUIVALENTS		(152,423)		(391,693)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR		291,223		436,608
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	$	138,800	$	44,915

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Cash and cash equivalents, beginning of period	$	286,662	$	436,507
Restricted cash, beginning of period		4,561		101
Cash, cash equivalents, and restricted cash, beginning of period	$	291,223	$	436,608

Cash and cash equivalents, end of period	$	138,071	$	44,286
Restricted cash, end of period		729		629
Cash, cash equivalents, and restricted cash, end of period	$	138,800	$	44,915

SUPPLEMENTAL INFORMATION:
Interest paid	$	7,008	$	7,107
Income taxes paid		138,420		73,174
NON-CASH INVESTING ACTIVITIES
Capital expenditures included in accounts payable		2,856		—
NON-CASH FINANCING ACTIVITIES:
Common stock issued under deferred compensation plans		7,563		6,064

~~(Unaudited)~~

(in thousands)

Nine Months Ended

September 30,

September 24,


2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES:



Net earnings

$
90,877

$
83,257

Adjustments to reconcile net earnings to net cash from operating activities:



Depreciation

36,010

29,014

Amortization of intangibles

3,549

1,868

Expense associated with share-based compensation arrangements

1,978

1,568

Expense associated with stock grant plans

144

105

Deferred income taxes (credits)

117

(53)

Equity in earnings of investee

(25)

(241)

Net (gain) loss on disposition and impairment of assets

(437)

94

Changes in:



Accounts receivable

(121,688)

(69,357)

Inventories

(820)

21,683

Accounts payable and cash overdraft

53,424

35,026

Accrued liabilities and other

34,221

33,413

NET CASH FROM OPERATING ACTIVITIES

97,350

136,377

CASH FLOWS FROM INVESTING ACTIVITIES:



Purchases of property, plant and equipment

(57,189)

(35,723)

Proceeds from sale of property, plant and equipment

2,121

516

Acquisitions, net of cash received

(59,859)

(66,615)

Repayments of debt of acquiree

—

(92,830)

Purchase of remaining noncontrolling interest, net of cash received

—

(1,100)

Cash contributed from noncontrolling interest

464

—

Advances of notes receivable

(234)

(5,400)

Collections on notes receivable

1,334

5,819

Purchases of investments

(12,155)

(4,468)

Proceeds from sale of investments

4,227

1,395

Other

(84)

(1,733)

NET CASH USED IN INVESTING ACTIVITIES

(121,375)

(200,139)

CASH FLOWS FROM FINANCING ACTIVITIES:



Borrowings under revolving credit facilities

610,038

52,479

Repayments under revolving credit facilities

(573,829)

(27,177)

Proceeds from issuance of common stock

476

396

Dividends paid to shareholders

(9,207)

(8,529)

Distributions to noncontrolling interest

(3,272)

(3,160)

Repurchase of common stock

(12,976)

—

Other

—

(28)

NET CASH FROM (USED IN) FINANCING ACTIVITIES

11,230

13,981

Effect of exchange rate changes on cash

1,255

(969)

NET CHANGE IN CASH AND CASH EQUIVALENTS

(11,540)

(50,750)

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR

34,489

88,342

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD

$
22,949

$
37,592

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:

Cash and cash equivalents, beginning of period

$
34,091

$
87,756

Restricted cash, beginning of period

398

586

Cash, cash equivalents, and restricted cash, beginning of period

$
34,489

$
88,342

Cash and cash equivalents, end of period

$
22,044

$
36,683

Restricted cash, end of period

905

909

Cash, cash equivalents, and restricted cash, end of period

$
22,949

$
37,592

SUPPLEMENTAL INFORMATION:



Interest paid

$
3,910

$
2,587

Income taxes paid

34,108

43,384

NON-CASH FINANCING ACTIVITIES:

Common stock issued under deferred compensation plans

4,673

3,657

See notes to consolidated condensed financial statements.

Table of Contents

~~UNIVERSAL FOREST PRODUCTS,~~UFP INDUSTRIES, INC.

NOTES TO UNAUDITED

CONDENSED CONSOLIDATED ~~CONDENSED~~ FINANCIAL STATEMENTS

A. BASIS OF PRESENTATION

The accompanying unaudited interim 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 of the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States. All intercompany transactions and balances have been eliminated.

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~~10-K for the fiscal year ended December ~~31, 2016.~~25, 2021.

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 24, 2016~~June 26, 2021 balances in the accompanying unaudited condensed consolidated ~~condensed~~ balance sheets.

In October 2021, the FASB issued ASU 2021-08,Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The ASU requires that an acquirer recognize and measure contract assets and contract liabilities in a business combination in accordance with Topic 606. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact of the new guidance on our consolidated financial statements.

Table of Contents

UFP INDUSTRIES, INC.


	Three Months Ended June 26, 2021
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	1,259,218	$	611,181	$	738,704	$	89,470	$	1,968	$	2,700,541
Intersegment net sales		65,147		24,985		20,034		126,054		(236,220)		—
Earnings from operations		62,051		79,526		67,107		16,304		11,947		236,935


	Six Months Ended June 25, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	2,114,672	$	1,287,702	$	1,761,847	$	219,983	$	5,983	$	5,390,187
Intersegment net sales		133,560		43,660		57,218		235,665		(470,103)		—
Earnings from operations		95,924		176,601		211,650		37,563		22,853		544,591


	Six Months Ended June 26, 2021
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	2,018,239	$	1,060,055	$	1,298,234	$	145,047	$	3,970	$	4,525,545
Intersegment net sales		112,733		42,891		34,495		223,450		(413,569)		—
Earnings from operations		115,596		119,936		100,125		24,282		14,483		374,422

The following table ~~below.~~ presents goodwill by segment as of June 25, 2022, and December 25, 2021 (in thousands):


	Retail		Industrial		Construction		All Other		Corporate		Total
Balance as of December 25, 2021	$	73,376	$	128,541	$	89,000	$	24,121	$	—	$	315,038
2022 Acquisitions		11,938		—		—		—		—		11,938
2022 Purchase Accounting Adjustments		293		(5,830)		(674)		595		—		(5,616)
Foreign Exchange, Net		—		—		(32)		(796)		—		(828)
Balance as of June 25, 2022	$	85,607	$	122,711	$	88,294	$	23,920	$	—	$	320,532

The ~~“Corporate” column includes unallocated administrative costs~~following table presents total assets by segment as of June 25, 2022, and ~~certain incentive compensation expense.~~December 25, 2021 (in thousands).

Three Months Ended September 30, 2017


      North

      South

      West

  All Other

  Corporate

      Total

Net sales to outside customers

$
310,384

$
206,050

$
378,714

$
161,438

$
—

$
1,056,586

Intersegment net sales

18,897

18,817

21,384

47,539

—

106,637

Segment operating profit

16,697

10,234

22,538

6,882

(4,080)

52,271


	Total Assets by Segment
	June 25,		December 25,
Segment Classification	2022		2021		% Change
Retail	$	1,075,310	$	844,189	27.4	%
Industrial		835,735		741,672	12.7
Construction		912,507		736,157	24.0
All Other		341,877		343,363	(0.4)
Corporate		445,394		579,890	(23.2)
Total Assets	$	3,610,823	$	3,245,271	11.3	%

Three Months Ended September 24, 2016


      North

      South

      West

  All Other

  Corporate

      Total

Net sales to outside customers

$
267,156

$
173,715

$
335,981

$
49,813

$
—

$
826,665

Intersegment net sales

14,318

9,642

22,054

4,574

—

50,588

Segment operating profit

14,630

9,900

19,962

2,959

(3,899)

43,552

Nine Months Ended September 30, 2017


      North

      South

      West

  All Other

  Corporate

      Total
Net sales to outside customers

$
857,858

$
616,376

$
1,088,744

$
412,113

$
—

$
2,975,091
Intersegment net sales

51,859

55,472

65,466

116,743

—

289,540
Segment operating profit (loss)

42,921

31,152

65,547

13,285

(12,914)

139,991

Nine Months Ended September 24, 2016


      North

      South

      West

  All Other

  Corporate

      Total
Net sales to outside customers

$
758,066

$
533,239

$
940,188

$
149,416

$
—

$
2,380,909
Intersegment net sales

42,071

28,693

65,325

16,559

—

152,648
Segment operating profit

43,054

35,830

58,434

11,542

(19,733)

129,127

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 ~~31.9~~%25.0% in the ~~third~~second quarter of ~~201~~7 ~~compared to~~ ~~32.5% for same period~~ in ~~201~~6~~. Our effective tax rate~~2022 and 2021 and was ~~33.0~~%24.5% in the first ~~nine~~six months of ~~201~~72022 compared to ~~34.2~~%24.4% for the same period in ~~201~~6, ~~primarily due~~2021.Permanent tax differences and credits have remained relatively consistent from 2021 to ~~recording a tax deduction for certain share-based compensation and fees at fair market value.~~2022, which is the primary reason the rate increased only slightly.

1415

Table of Contents

~~UNIVERSAL FOREST PRODUCTS,~~UFP INDUSTRIES, INC.

I. COMMON STOCK

Below is a summary of common stock issuances for the first six months of 2022 and 2021 (in thousands, except average share price):


	June 25, 2022
Share Issuance Activity	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	24	$	72.58

Shares issued under the employee stock gift program	2		78.57
Shares issued under the director retainer stock program	2		79.46
Shares issued under the bonus plan	755		82.73
Shares issued under the executive stock match plan	62		82.87
Forfeitures	(6)
Total shares issued under stock grant programs	815	$	82.72

Shares issued under the deferred compensation plans	92	$	82.59


	June 26, 2021
Share Issuance Activity	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	15	$	72.94

Shares issued under the employee stock gift program	1		79.64
Shares issued under the director retainer stock program	3		67.77
Shares issued under the bonus plan	468		53.68
Shares issued under the executive stock grants plan	77		60.24
Forfeitures	(18)
Total shares issued under stock grant programs	531	$	54.71

Shares issued under the deferred compensation plans	99	$	61.50

During the first six months of 2022, we repurchased approximately 1,210,000 shares of our common stock at an average share price of $77.06.

During the first six months of 2021, we did not repurchase any of our shares of common stock.

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UFP INDUSTRIES, INC.

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. Cost is determined on a weighted average FIFO basis. 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 Statement 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. The lower of cost or net realizable value adjustment to inventory as of June 25, 2022 and June 26, 2021 was $9.3 million and $23.2 million, respectively.

K. SUBSEQUENT EVENTS

On June 27, 2022, we acquired 50% of the equity of Dempsey Wood Products, LLC, for $66.0 million. Based in Orangeburg, South Carolina, Dempsey Wood Products produces kiln-dried lumber, pallet lumber, and other industrial wood products.

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UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Universal Forest Products,~~UFP Industries, Inc. is a holding company with subsidiaries throughout North America, Europe, Asia, and in Australia that supply wood, wood composite and other products to three ~~robust~~ markets: retail, industrial, and construction. ~~The Company is~~We are headquartered in Grand Rapids, ~~Mich.~~Michigan. For more information about ~~Universal Forest Products,~~UFP Industries, Inc., or ~~its~~our affiliated operations, go to ~~www.ufpi.com~~.www.ufpi.com.

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. The Company does 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 the price of lumber; adverse or unusual weather conditions; adverse economic conditions in the markets we serve; government regulations, particularly involving environmental and safety ~~regulations;~~regulations, government imposed “stay at home” orders and directives to cease or curtail operations; and our ability to make successful business acquisitions. Certain of these risk factors as well as other risk factors and additional information are included in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission. We are pleased to present this overview of ~~2017.~~the second quarter of 2022.

OVERVIEW

Our results for the ~~third~~second quarter of ~~2017 were impacted by~~2022 include the ~~following:~~following highlights:

●

Our ~~gross~~net sales ~~increased by 28%~~were up 7% compared to the ~~third~~second quarter of ~~2016,~~2021, which was comprised of a ~~22%~~4% increase in selling prices, a 1% increase in unit sales due to acquisitions completed since June of last year, and a 6%2% increase in organic unit sales. The overall increase in our selling prices ~~primarily~~is due to a combination of an improvement in our product mix of value-added products which tend to be sold on a fixed price, elevated end market demand, and our value-based selling initiatives. Organic unit growth of 17% in our construction segment was offset by an organic unit decline of 7% in our retail segment and 1% in our industrial segment.

●

Our gross profits increased by $82.2 million, or 19.5%, compared to the ~~commodity lumber market (see Historical Lumber Prices below).~~same period of the prior year. Acquired operations contributed ~~15%~~$6 million to the increase in our unit sales growth. Our 7% organic growth rate was primarily driven by our sales to industrial, retail, residential construction, and manufactured housing customers. Unit sales to commercial construction customers decreased.

~~Our operating~~gross profits. Excluding the impact of acquisitions, gross profits increased by ~~20.0%,~~$76.2 million and we estimate that value-added products contributed $131 million to the increase, which ~~is comparable with our 22% increase~~was offset by a decrease in ~~unit sales. The shortfall in our~~gross profit ~~growth was primarily~~of $55 million due to the impact of ~~volatile~~falling lumber prices on certain commodity-based products that are sold on a variable price formula.

●

Our operating profits increased $48.6 million, or 20%, compared to the second quarter of 2021. This increase resulted from a variety of factors including improved leveraging of our fixed costs in business units that experienced organic growth, increased sales of new and value-added products which have higher gross ~~profits~~margins, and our ability to effectively include lumber and other cost increases in the ~~impact~~selling prices of ~~acquired operations which~~our products. In addition, our value-based selling practices have enabled us to improve our profit per unit. Acquisitions contributed ~~unit sales growth without a proportionate~~approximately $2.5 million to our increase in operating profits.

1518

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~~UNIVERSAL FOREST PRODUCTS,~~UFP INDUSTRIES, INC.

●

Our cash flows from operations for the first six months of 2022 increased to $90 million compared to $116 million of cash used in operations during the first six months of 2021. The improved cash flows resulted from net earnings and non-cash expenses totaling $475 million, compared to $328 million last year, offset by a $385 million increase in net working capital since the end of last year, compared to a $444 million increase in the prior year. Last year, our inventories increased more significantly from the beginning of the year until the end of June, primarily due to the increase in lumber prices, as reflected in the table below, which remained elevated at the end of the second quarter.

●

Our net debt (debt and cash overdraft less cash) at the end of June 2022 was $190.7 million compared to $561.9 million at the end of June 2021. Our unused borrowing capacity under revolving credit facilities and a shelf agreement with certain lenders along with our cash surplus resulted in total liquidity of approximately $1.2 billion at the end of the second quarter of 2022.

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
	2022			2021
January	$	1,112		$	890
February		1,225			954
March		1,321			1,035
April		1,051			1,080
May		948			1,428
June		670			1,344

Second quarter average	$	890		$	1,284
Year-to-date average	$	1,055		$	1,122

Second quarter percentage change		(30.7)	%
Year-to-date percentage change		(6.0)	%

Random Lengths Composite

Average $/MBF


2017

2016

January

$
356

$
316

February

393

310

March

401

321

April

424

345

May

416

356

June

399

353

July

411

351

August

417

367

September

416

354

Third quarter average

$
415

$
357

Year-to-date average

$
404

$
341

Third quarter percentage change

16.2
%

Year-to-date percentage change

18.5
%

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UFP INDUSTRIES, INC.

In addition, a Southern Yellow Pine (“SYP”) composite price, which we prepare and use, is presented below. Our purchases of this species ~~comprised approximately 44% and 42%~~comprise almost two-thirds of our total lumber ~~purchases through~~purchases.


	Southern Yellow Pine
	Average $/MBF
	2022			2021
January	$	1,010		$	858
February		1,115			903
March		1,198			938
April		902			922
May		732			1,150
June		574			1,052

Second quarter average	$	736		$	1,041
Year-to-date average	$	922		$	971

Second quarter percentage change		(29.3)	%
Year-to-date percentage change		(5.0)	%

The decrease in overall lumber prices for the ~~first nine months~~second quarter of ~~2017~~the year was primarily due to demand in the retail and ~~2016, respectively.~~

Random Lengths SYP

Average $/MBF


2017

2016

January

$
397

$
358

February

420

357

March

433

366

April

438

389

May

416

397

June

399

382

July

381

380

August

383

391

September

387

375

Third quarter average

$
384

$
382

Year-to-date average

$
406

$
377

Third quarter percentage change

0.5
%

Year-to-date percentage change

7.7
%

~~Table~~housing markets beginning to return to more normalized levels and improvements in supply chain constraints. A change in lumber prices impacts our profitability of ~~Contents~~

~~UNIVERSAL FOREST PRODUCTS, INC.~~

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 sales levels (and working capital requirements) are impacted by the lumber costs of our products. Lumber costs were ~~48.2%~~54.8% and ~~48.4%~~63.7% of our sales in the first ~~nine~~six months of ~~2017~~2022 and ~~2016,~~2021, respectively. The decrease from the prior year ratio reflects an improvement in our sales mix of value-added products as well as our value-based selling practices.

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). Moreover, as explained below, our products are priced differently. Some of our products have fixed selling prices, while the selling prices of other products are indexed to the reported Lumber Market with a fixed dollar adder to cover conversion costs and profits. Consequently, the level and trend of the Lumber Market impact our products differently.

Below is a general description of the primary ways in which our products are priced.

●

Products with fixed selling prices. These products include value-added products, such as ~~deck components and fencing~~manufactured items, sold ~~to retail customers, as well as trusses, wall panels and other components sold to the construction market, and most industrial packaging products.~~within all segments. Prices for these products are generally fixed at the time of the sales quotation for a specified period of ~~time or are based upon a specific quantity.~~time. In order to ~~maintain margins and~~ reduce any exposure to adverse trends in the price of component lumber products, we attempt to lock in costs with our suppliers or purchase necessary inventory for these sales commitments. ~~Also, the~~The time period ~~and quantity limitations~~limitation eventually ~~allow~~allows us to periodically re-price our products for changes in lumber costs from our suppliers.

We believe our percentage of sales of fixed price items is usually greatest in our third and fourth quarters.

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●

Products with selling prices indexed to the reported Lumber Market with a fixed dollar “adder” to cover conversion costs and ~~profits.~~profit. These products primarily include treated lumber, ~~remanufactured lumber,~~panel goods, other commodity-type items, and trusses sold to the manufactured housing industry. For these products, we estimate the customers’ needs and we carry anticipated levels of inventory. Because lumber costs are incurred in advance of final sale prices, subsequent increases or decreases in the market price of lumber impact our gross margins.

We believe our sales of these products are at their highest relative level in our second quarter, primarily due to pressure-treated lumber sold in our retail segment.

For each of the product pricing categories above, our margins are exposed to changes in the trend of lumber prices.

The greatest risk associated with changes in the trend of lumber prices is on the following ~~products~~:products:

●

Products with significant inventory levels with low turnover rates, whose selling prices are indexed to the Lumber Market. In other words, the longer the period of time these products remain in inventory, the greater the exposure to changes in the price of lumber. This would include treated lumber, which ~~comprises~~comprised approximately ~~19%~~16% of our total ~~sales.~~annual sales in 2021. This exposure is less significant with remanufactured lumber, panel goods, other commodity-type items, and trusses sold to the manufactured housing market ~~and other similar products,~~ due to the higher rate of inventory turnover. We attempt to mitigate the risk associated with treated lumber through ~~vendor~~inventory consignment programs with our vendors. Our new Sunbelt and Spartanburg Forest Products plants began participating in these consignment programs in 2022, and we estimate that 24.2% of their inventory ~~programs.~~was consigned with vendors. (Please refer to the “Risk Factors” section of our annual report on form ~~10‑K,~~10-K, filed with the United States Securities and Exchange Commission.)

●

Products with fixed selling prices sold under long-term supply arrangements, particularly those involving multi-family construction projects. We attempt to mitigate this risk through our purchasing practices ~~by locking in costs.~~

and longer vendor commitments.

During the first nine months of 2017, volatility in the lumber market has impacted our gross profits on products sold under each of the general pricing methods described above. For example, the dramatic rise in lumber prices, which peaked in April, resulted in a decline in gross profit per unit on products sold with fixed prices primarily in the second

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

quarter. Additionally, the subsequent decline in lumber prices in May, June, and July resulted in a decline in gross profit per unit on products sold with a variable price indexed to the lumber market. We anticipate these trends may continue to impact our results into the fourth quarter until we reach a point of re-pricing products sold via a fixed price with our customers and selling through higher cost material sold on a variable price which is mitigated to some degree by stability of the SYP market.

~~Finally, hurricane Harvey and Irma as well as recent wildfires in British Columbia have resulted in sharp increases in lumber prices in the third quarter of 2017.~~

In addition to the impact of the 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

							Period 1			Period 2
Lumber cost	$	300		$	400		$	300		$	400
Conversion cost		50			50			50			50
= Product cost		350			450			350			450
Adder		50			50			50			50
= Sell price	$	400		$	500		$	400		$	500
Gross margin		12.5	%		10.0	%		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. ~~In order to more effectively evaluate our profitability in such periods, we believe it is useful to compare our change in units shipped with our changes in costs and profits.~~

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UFP INDUSTRIES, INC.

BUSINESS COMBINATIONS

We completed ~~three~~two business ~~acquisitions~~acquisition during the first ~~nine~~six months of ~~2017~~fiscal 2022 and ~~six~~nine during all of ~~2016.~~fiscal 2021. The annual historical sales attributable to acquisitions completed in ~~2017 and 2016 was~~the first six months of fiscal 2022 is approximately ~~$124~~$62 million, ~~and $324 million, respectively.~~while acquisitions completed during the last six months of 2021 have annual sales of approximately $76 million. These business combinations were not significant to our quarterly ~~or year-to-date operating~~ results individually or in aggregate and thus pro forma results for ~~2017 or 2016~~2022 and 2021 are not presented.

See Notes to the Unaudited Condensed Consolidated Financial Statements, Note F, “Business Combinations” for additional information.

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

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.


	Three Months Ended				Nine Months Ended
	September 30,		September 24,		September 30,		September 24,
	2017		2016		2017		2016

									Three Months Ended				Six Months Ended
									June 25,		June 26,		June 25,		June 26,
									2022		2021		2022		2021
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	86.3		85.7		86.1		85.2		82.6		84.4		81.8		84.4
Gross profit	13.7		14.3		13.9		14.8		17.4		15.6		18.2		15.6
Selling, general, and administrative expenses	8.8		9.1		9.2		9.3		7.4		6.8		8.1		7.4
Other (gains) losses, net									0.1		—		—		—
Earnings from operations	4.9		5.3		4.7		5.4		9.8		8.8		10.1		8.3
Other expense (income), net	0.1		0.1		0.1		0.1
Other expense, net									0.3		0.1		0.3		0.1
Earnings before income taxes	4.8		5.2		4.6		5.3		9.5		8.7		9.9		8.2
Income taxes	1.5		1.7		1.5		1.8		2.4		2.2		2.4		2.0
Net earnings	3.3		3.5		3.1		3.5		7.2		6.5		7.4		6.2
Less net earnings attributable to noncontrolling interest	(0.1)		(0.1)		(0.1)		(0.1)		(0.2)		(0.1)		(0.2)		(0.1)
Net earnings attributable to controlling interest	3.2	%	3.4	%	3.0	%	3.4	%	7.0	%	6.4	%	7.3	%	6.1	%

Note: Actual percentages are calculated and may not sum to total due to rounding.

~~GROSS~~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. The percentages displayed below represent the percentage change from the prior year comparable period.


	Percentage Change
	Three Months Ended				Six Months Ended
	June 25,		June 26,		June 25,		June 26,
	2022		2021		2022		2021
Units sold	3.0	%	47.0	%	6.0	%	41.0	%
Gross profit	19.5		105.6		38.7		90.2
Selling, general, and administrative expenses	16.3		62.2		29.9		50.0
Earnings from operations	20.5		156.5		45.4		148.0

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UFP INDUSTRIES, INC.

The following table presents, for the periods indicated, our selling, general, and administrative expenses (SG&A) as a percentage of gross profit. 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, we believe this ratio provides an enhanced view of our effectiveness in managing these costs and mitigates the impact of changing lumber prices.



	Three Months Ended				Six Months Ended
		June 25,		June 26,		June 25,		June 26,
		2022		2021		2022		2021
Gross profit	$	503,452	$	421,294	$	981,815	$	707,848
Selling, general, and administrative expenses	$	214,538	$	184,539	$	434,688	$	334,637
SG&A as percentage of gross profit		42.6%		43.8%		44.3%		47.3%

Bonus expense, which is a component of SG&A, decreased in the second quarter to $55 million from $61 million in the prior year due to modifications made to our bonus plan intended to reduce the payout rate when higher levels of pre-bonus earnings from operations are achieved. The adjustment to reduce bonus expense based on the new parameters was recorded in the second quarter and totaled $17 million. As a result of this change, our year to date bonus accrual rate has decreased to 17.5% of pre-bonus earnings from operations from a historical rate of approximately 20.0%. Bonus rates continue to be derived based on return on investment achieved. Bonus expense in the first six months of 2022 totaled $124 million compared to $98 million in the prior year.

Operating Results by Segment:

Our business segments consist of UFP Retail Solutions, UFP Industrial and UFP Construction, and align with the end markets we serve. Among other things, this structure allows for a more specialized and consistent sales approach among Company operations, 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, Industrial, and Construction segments. The exception to this market-centered reporting and management structure is our International segment, which comprises our Mexico, Canada, Europe, Asia, and Australia operations 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 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).


	Three Months Ended June 25, 2022

	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales	$	1,121,440		676,333	$	975,376	$	124,416	$	3,309	$	2,900,874
Cost of goods sold		1,048,260		514,216		748,060		83,336		3,549		2,397,421
Gross profit		73,180		162,117		227,316		41,080		(240)		503,453
Selling, general, administrative expenses		48,387		67,235		94,638		16,356		(12,078)		214,538
Other		266		672		(154)		1,976		589		3,349
Earnings from operations	$	24,527	$	94,210	$	132,832	$	22,748	$	11,249	$	285,566

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UFP INDUSTRIES, INC.


	Three Months Ended June 26, 2021

	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales	$	1,259,218	$	611,181	$	738,704	$	89,470	$	1,968	$	2,700,541
Cost of goods sold		1,136,887		476,731		604,414		59,745		1,470		2,279,247
Gross profit		122,331		134,450		134,290		29,725		498		421,294
Selling, general, administrative expenses		60,376		54,903		66,936		13,604		(11,280)		184,539
Other		(96)		21		247		(183)		(169)		(180)
Earnings from operations	$	62,051	$	79,526	$	67,107	$	16,304	$	11,947	$	236,935



	Six Months Ended June 25, 2022

	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales	$	2,114,672	$	1,287,702	$	1,761,847	$	219,983	$	5,983	$	5,390,187
Cost of goods sold		1,907,155		976,031		1,373,119		147,360		4,707		4,408,372
Gross profit		207,517		311,671		388,728		72,623		1,276		981,815
Selling, general, administrative expenses		111,055		134,466		176,975		32,981		(20,789)		434,688
Other		538		604		103		2,079		(788)		2,536
Earnings from operations	$	95,924	$	176,601	$	211,650	$	37,563	$	22,853	$	544,591



	Six Months Ended June 26, 2021

	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales	$	2,018,239	$	1,060,055	$	1,298,234	$	145,047	$	3,970	$	4,525,545
Cost of goods sold		1,795,435		845,280		1,075,260		97,771		3,951		3,817,697
Gross profit		222,804		214,775		222,974		47,276		19		707,848
Selling, general, administrative expenses		107,476		95,016		122,481		24,025		(14,361)		334,637
Other		(268)		(177)		368		(1,031)		(103)		(1,211)
Earnings from operations	$	115,596	$	119,936	$	100,125	$	24,282	$	14,483	$	374,422

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UFP INDUSTRIES, INC.

The following tables present the components of our operating results, for the periods indicated, as a percentage of net sales by segment.


	Three Months Ended June 25, 2022

	Retail		Industrial		Construction		All Other		Corporate	Total
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	N/A	100.0	%
Cost of goods sold	93.5		76.0		76.7		67.0		—	82.6
Gross profit	6.5		24.0		23.3		33.0		—	17.4
Selling, general, administrative expenses	4.3		9.9		9.7		13.1		—	7.4
Other	—		—		—		1.6		—	—
Earnings from operations	2.2	%	13.9	%	13.6	%	18.3	%	—	9.8	%

Note: Actual percentages are calculated and may not sum to total due to rounding.


	Three Months Ended June 26, 2021

	Retail		Industrial		Construction		All Other		Corporate	Total
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	N/A	100.0	%
Cost of goods sold	90.3		78.0		81.8		66.8		—	84.4
Gross profit	9.7		22.0		18.2		33.2		—	15.6
Selling, general, administrative expenses	4.8		9.0		9.1		15.2		—	6.8
Other	—		—		—		(0.2)		—	—
Earnings from operations	4.9	%	13.0	%	9.1	%	18.2	%	—	8.8	%

Note: Actual percentages are calculated and may not sum to total due to rounding.



	Six Months Ended June 25, 2022

	Retail		Industrial		Construction		All Other		Corporate	Total
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	N/A	100.0	%
Cost of goods sold	90.2		75.8		77.9		67.0		—	81.8
Gross profit	9.8		24.2		22.1		33.0		—	18.2
Selling, general, administrative expenses	5.3		10.4		10.0		15.0		—	8.1
Other	0.3		—		—		0.9		—	—
Earnings from operations	4.5	%	13.7	%	12.0	%	17.1	%	—	10.1	%

Note: Actual percentages are calculated and may not sum to total due to rounding.



	Six Months Ended June 26, 2021

	Retail		Industrial		Construction		All Other		Corporate	Total
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	N/A	100.0	%
Cost of goods sold	89.0		79.7		82.8		67.4		—	84.4
Gross profit	11.0		20.3		17.2		32.6		—	15.6
Selling, general, administrative expenses	5.3		9.0		9.4		16.6		—	7.4
Other	—		—		—		(0.7)		—	—
Earnings from operations	5.7	%	11.3	%	7.7	%	16.7	%	—	8.3	%

Note: Actual percentages are calculated and may not sum to total due to rounding.

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UFP INDUSTRIES, INC.

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, structural lumber and other products for the manufactured housing industry, engineered wood components for residential and commercial construction, ~~specialty wood packaging, components and packing materials for various industries, and~~ customized interior fixtures used in a variety of retail stores, commercial, and other ~~structures.~~structures, and specialty wood packaging, components and packing materials for various industries. Our strategic long-term sales objectives include:

●	· Maximizing unit sales growth while achieving return on investment goals. The following table presents estimates, for the periods indicated, of our percentage change in net sales which were attributable to changes in overall selling prices versus changes in units shipped.


	% Change
	in Sales		in Selling Prices		in Units		Acquisition Unit Change		Organic Unit Change
Second quarter 2022 versus Second quarter 2021	7.4	%	4.4	%	3.0	%	1.0	%	2.0	%
Year-to-date 2022 versus Year-to-date 2021	19.1	%	13.1	%	6.0	%	4.0	%	2.0	%

●

Diversifying our end market sales mix by increasing sales of ~~specialty~~structural wood and protective packaging to industrial users, increasing our penetration of the concrete forming market, increasing our sales of engineered wood components for custom home, multi-family, military and light commercial construction, and increasing our market share with independent ~~retailers, and increasing our sales of customized interior fixtures used in a variety of markets.~~

retailers.

●

Expanding geographically in our core businesses, domestically and internationally.

●

Increasing our sales of "value-added" products ~~which primarily~~and enhancing our product offering with new or improved products. Value-added products generally consist of fencing, decking, lattice, and other specialty products sold to the retail market, ~~specialty~~structural wood packaging, engineered wood components, customized interior fixtures, manufactured and assembled concrete forms, and "wood alternative" products. Engineered wood components include roof trusses, wall panels, and floor systems. Wood alternative products consist ~~primarily~~ of ~~composite~~products manufactured with wood and non-wood composites, metal, and plastics. Although we consider the treatment of dimensional lumber and panels with certain chemical preservatives a value-added process, treated lumber is not presently included in the value-added sales totals.

Remanufactured lumber and panels that are components of finished goods are also generally categorized as “commodity-based” products.

~~Maximizing unit sales growth while achieving return on investment goals.~~

Developing new products and expanding our product offering for existing customers. New product sales were $107.7 million in the third quarter of 2017 compared to $88.5 million during the third quarter of 2016. New product sales year-to-date for 2017 and 2016 were $313.6 million and $255.3 million, respectively.

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

New Product Sales by Market

New Product Sales by Market

Three Months Ended

Nine Months Ended
(in thousands)

September 30,

September 24,



September 30,

September 24,


Market Classification

2017

2016

% Change

2017

2016

% Change
Retail

$
65,383

53,252

22.78%

$
192,194

$
153,966

24.83%
Industrial

26,738

23,374

14.39%

76,125

65,642

15.97%
Construction

15,577

11,911

30.78%

45,321

35,717

26.89%
Total New Product Sales

107,698

88,537

21.64%

313,640

255,325

22.84%

~~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.~~

~~The following table presents, for the periods indicated, our gross sales and percentage change in gross sales by market classification.~~

Three Months Ended

Nine Months Ended
(in thousands)

September 30,

September 24,


September 30,

September 24,



Market Classification

2017

2016

% Change

2017

2016

% Change
Retail

$
391,895

$
339,275

15.5
%

$
1,162,785

$
1,018,203

14.2
%
Industrial

369,506

232,017

59.3
%

982,675

661,718

48.5
%
Construction

310,026

267,772

15.8
%

872,997

740,393

17.9
%
Total Gross Sales

1,071,427

839,064

27.7
%

3,018,457

2,420,314

24.7
%
Sales Allowances

(14,841)

(12,399)

19.7
%

(43,366)

(39,405)

10.1
%
Total Net Sales

$
1,056,586

$
826,665

27.8
%

$
2,975,091

$
2,380,909

25.0
%

~~Note: During 2017, certain customers were reclassified to a different market. Prior year information has been restated to reflect these changes.~~

Gross sales in the third quarter of 2017 increased 28% compared to the same period of 2016, due to a 22% increase in unit sales and a 6% increase in selling prices primarily due to the Lumber Market. Acquired operations contributed 15% to our unit sales growth, and our organic unit sales growth was 7%.

~~Changes in our gross sales by market are discussed below.~~

~~Retail:~~

Gross sales to the retail market increased almost 16% in the third quarter of 2017 compared to the same period of 2016, due to a 12% increase in unit sales and a 4% increase in selling prices. Within this market, sales to our big box customers increased almost 13%, and sales to other independent retailers increased over 20%. Businesses we acquired contributed 7% to our growth in unit sales, primarily to independent retail customers. Our organic unit growth was 5% for the quarter. By comparison, “big box” same store sales growth during the third quarter has been reported at approximately 6.3%.

Gross sales to the retail market increased over 14% in the first nine months of 2017 compared to the same period of 2016, due to a 9% increase in unit sales and a 5% increase in selling prices. Within this market, sales to our big box customers increased almost 15%, and sales to other independent retailers increased almost 14%. Businesses we acquired contributed 6% to our growth in unit sales, primarily to independent retail customers. Our organic unit growth was 3% in the first nine months of 2017. By comparison, “big box” same store sales growth in the first nine months of 2017 has been reported at approximately 6.0%.

~~Industrial:~~

Gross sales to the industrial market increased over 59% in the third quarter of 2017 compared to the same period of 2016, resulting from a 54% increase in unit sales and a 5% increase in selling prices. Businesses we acquired contributed

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

~~43% to our growth in unit sales. Our organic growth in unit sales of 11% was primarily due to new operations, adding 578 new customers, and share gains with several existing customers.~~

Gross sales to the industrial market increased almost 49% in the first nine months of 2017 compared to the same period of 2016, resulting from a 43% increase in unit sales and a 6% increase in selling prices. Businesses we acquired contributed 34% to our growth in unit sales. Our organic growth in unit sales of 9% was primarily due to same factors discussed above.

~~Construction:~~

Gross sales to the construction market increased almost 16% in the third quarter of 2017 compared to 2016. The increase was due to an 8% increase in unit sales and an 8% increase in our selling prices. Our increase in unit sales was driven by a 12% increase to manufactured housing customers, and an 8% increase to residential construction customers, offset by a 5% decrease to commercial construction customers.

~~By comparison (and based upon various industry publications):~~

~~Production of HUD-code manufactured homes in June, July, August 2017, the most recent period reported, was up 12.0% compared to the same period of 2016.~~

~~Non-residential construction activity in July and August increased approximately 10.2% compared to the same period of 2016.~~

National housing starts increased approximately 0.9% in the period from June through August 2017 (our sales trail housing starts by about a month) compared to the same period of 2016. Our sales growth exceeds national industry growth due to certain market share gains and organic sales growth in our eastern regions.

Gross sales to the construction market increased almost 18% in the first nine months of 2017 compared to 2016. The increase was due to a 9% increase in unit sales and a 9% increase in our selling prices. Our increase in unit sales was driven by an 11% increase to manufactured housing customers, an 11% increase to residential construction customers, and a 1% increase to commercial construction customers due to the same factors discussed above.

~~Value-Added and Commodity-Based Sales:~~

The following table presents, for the periods indicated, our percentage of value-added and commodity-based sales to total ~~sales. Value-added products generally carry higher gross margins than~~sales by our ~~commodity-based products.~~segments:


	Three Months Ended June 25, 2022				Three Months Ended June 26, 2021
	Value-Added		Commodity-Based		Value-Added		Commodity-Based
Retail	45.3	%	54.7	%	39.7	%	60.3	%
Industrial	70.5	%	29.5	%	63.8	%	36.2	%
Construction	74.7	%	25.3	%	67.9	%	32.1	%
All Other and Corporate	75.5	%	24.5	%	73.4	%	26.6	%
Total Sales	62.2	%	37.8	%	53.8	%	46.2	%

Three Months Ended

Nine Months Ended


September 30,

September 24,

September 30,

September 24,

2017

2016

2017

2016
Value-Added

63.9
%

61.1
%

62.9
%

61.5
%
Commodity-Based

36.1
%

38.9
%

37.1
%

38.5
%

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UFP INDUSTRIES, INC.

	Six Months Ended June 25, 2022				Six Months Ended June 26, 2021
	Value-Added		Commodity-Based		Value-Added		Commodity-Based
Retail	43.2	%	56.8	%	41.5	%	58.5	%
Industrial	69.2	%	30.8	%	65.1	%	34.9	%
Construction	73.7	%	26.3	%	68.3	%	31.7	%
All Other and Corporate	73.9	%	26.1	%	72.7	%	27.3	%
Total Sales	60.5	%	39.5	%	55.5	%	44.5	%

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 ~~gross margin decreased to 13.7% from 14.3% comparing~~overall unit sales of value-added products increased approximately 6% in the ~~third~~second quarter of ~~2017~~2022 compared to 2021, comprised of a 2% contribution from acquisitions and 4% organic growth. Our overall unit sales of value-added products increased approximately 6% in the first six months of 2022 compared to the same period last year, comprised of a 3% contribution from acquisitions and 3% organic growth. Our organic unit sales of commodity-based products decreased approximately 1% quarter-over-quarter and our overall unit sales of commodity-based products increased approximately 5% in the first six months of 2022 compared to the same period last year, comprised of a 4% contribution from acquisitions and 1% organic growth.

●

Developing new products. We define new products as those that will generate sales of at least $1 million per year within 4 years of launch and are still growing and gaining market penetration. New product sales in the second quarter of 2022 increased 37%. Approximately $211 million of new product sales for the first six months of 2021, while still sold, were sunset in 2022 and excluded from the table below because they no longer meet the definition above. Our goal is to achieve annual new product sales of at least $525 million in 2022.

The table below presents new product sales in thousands:


	New Product Sales by Segment						New Product Sales by Segment
	Three Months Ended						Six Months Ended
	June 25,		June 26,		%		June 25,		June 26,		%
	2022		2021		Change		2022		2021		Change
Retail	$	71,410		68,064	4.9	%	$	137,855	$	119,966	14.9	%
Industrial		68,108		37,108	83.5	%		130,945		65,432	100.1	%
Construction		40,692		26,326	54.6	%		77,499		42,200	83.6	%
All Other and Corporate		623		594	4.9	%		1,393		907	53.6	%
Total New Product Sales		180,833		132,092	36.9	%	$	347,692	$	228,505	52.2	%

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 second quarter of 2022 decreased by 11% compared to the same period of ~~2016~~2021, due to a 5% decrease in selling prices, a 2% decrease due to the ~~higher level~~transfer of ~~lumber prices. Our 22.6%~~certain sales to the Construction segment this year, and an organic unit decrease of 4%. These factors were offset by acquisition unit growth of 1%. The decline in organic unit sales was experienced in nearly all of our retail business units as consumer demand begins to return to more normalized levels. By business unit, we experienced organic unit growth of 3% in UFP Edge and this was offset by organic unit decreases in our ProWood (1%), Retail Building Products (2%), Sunbelt (8%), Deckorators (9%), Handprint (18%), and Outdoor Essentials (22%) business units. Capacity expansion contributed to our unit increase in ~~gross profit dollars compares favorably with~~UFP Edge, and we believe investments we’ve made to expand capacity in our ~~22% increase in unit~~Deckorators and UFP Edge business units will add planned sales ~~during~~of nearly $100 million to the ~~same period. Acquired operations contributed $19.9~~Retail segment for all of 2022. Finally, sales to big box customers were down 10%, while sales to independent retailers decreased 15%.

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UFP INDUSTRIES, INC.

Gross profits decreased by $49.2 million, ~~of gross profit in~~or 40.2% to $73.2 million for the ~~third~~second quarter of ~~2017. Excluding acquisitions, our gross profits increased by $6.7 million, or 5.7%, over the same period last year as follows:~~

~~Our gross profit on sales to the retail market increased by approximately $1 million.~~

~~Our gross profit on sales to the industrial market increased by approximately $1 million.~~

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

~~Our gross profit on sales to the construction market increased by over $3 million.~~

Our gross margin decreased to 13.9% from 14.8% comparing the first nine months of 2017 to the same period of 2016. Our 17.4% increase in gross profit dollars compares unfavorably with our 19% increase in unit sales in the first nine months of 20172022 compared to the same period last year. The ~~increase~~decrease in ~~our~~ gross profit ~~dollars~~ was attributable to the following:

●

The gross profits of our Sunbelt and ProWood business units decreased by a total of $29.9 million, primarily due to acquired operations which contributed $45.6 million of gross profit in the first nine months of 2017. Excluding acquisitions, our gross profits increased by $15.8 million over the same period last year as follows:

~~Our gross profit on sales~~ to the ~~retail market increased by over $3 million.~~

~~Our gross profit~~impact that declining lumber prices had on pressure treated products sold at a variable price. A decrease in unit sales also contributed to the ~~industrial market decreased by over $5 million.~~

reduction in gross profit.

●

Our ~~gross profit on sales~~UFP Edge and Retail Building Products business units contributed $21.1 million to the ~~construction market increased by over $12 million.~~

decrease in gross profits due to the impact that declining lumber prices had on products sold at a variable price in these business units.

●

Acquired operations contributed $2.7 million, which partially offset the decrease in gross profits.

~~SELLING, GENERAL AND ADMINISTRATIVE EXPENSES~~

~~Selling, general and administrative (“~~SG~~&A”) expenses increased~~&A decreased by approximately ~~$17.9~~$12.0 million, or ~~24.0%~~19.9%, in the ~~third~~second quarter of ~~2017~~2022 compared to the same period of ~~2016, while we reported a 22% increase in unit sales.~~2021. SG&A of recently acquired businesses added roughly $1.5 million to overall SG&A. Accrued bonus expense, which varies with our overall profitability and return on investment, decreased approximately $17.2 million from the second quarter of 2021 and totaled ~~$12.4~~approximately $3.8 million for the quarter. Bonus expense was also impacted by the plan modification disclosed above. The decrease was partially offset by increases in advertising of $1.3 million, bad debt expenses of $1.1 million, travel related expenses of $0.8 million, and salaries and wages of $0.6 million.

Earnings from operations for the Retail reportable segment decreased in the ~~third~~second quarter of ~~2017~~2022 compared to ~~$12.0~~2021 by $37.5 million, or 60.5%, as a result of the factors mentioned above.

Net sales in ~~2016. Acquired operations~~the first six months of 2022 increased by 5% compared to the same period of 2021, due to a 4% increase in selling prices and acquisition unit growth of 6%, offset by a 2% decrease due to the transfer of certain sales to the Construction segment, and an organic unit decrease of 3%. We experienced organic unit growth of 5% in our UFP Edge business unit. This increase was offset by organic unit decreases in our ProWood (1%), Retail Building Products (4%), Sunbelt (6%), Deckorators (8%), Outdoor Essentials (14%), and Handprint (19%) business units. Capacity expansion contributed to our unit increase in UFP Edge. Finally, sales to big box customers increased 5%, while sales to independent retailers increased 3%.

Gross profits decreased by $15.3 million, or 6.9% to $207.5 million for the first six months of 2022 compared to the same period last year. Our decrease in gross profit was attributable to the following:

●

The gross profits of our Sunbelt and ProWood business units decreased by a total of $17.8 million, primarily due to the impact that declining lumber prices had on pressure treated products that are sold at a variable price.

●

Our Retail Building Products business unit contributed $13.3 million to the decrease in gross profits due to the impact that declining lumber prices had on products sold at a variable price.

●

Acquired operations contributed $14.3 million, which partially offset the decrease in gross profits.

SG&A increased by approximately ~~$15~~$3.6 million, or 3.3%, in the first six months of 2022 compared to the same period of 2021. SG&A of recently acquired businesses added $4.1 million to overall SG&A. Accrued bonus expense, which varies with our ~~year over year increase.~~overall profitability and return on investment, decreased approximtely $10.4 million and totaled approximately $24.5 million for the first six months of 2022. Bonus expense was also impacted by the plan modification disclosed above. The remaining increase was primarily due to ~~an increase~~increases in ~~compensation~~salaries and ~~benefit costs.~~ wages of $2.7 million, advertising of $1.8 million, travel-related expenses of $1.4 million, and bad debt expenses of $0.9 million.

~~Selling, general and administrative (“SG&A”) expenses increased by approximately $50.5 million, or 22.6%,~~

Earnings from operations for the Retail reportable segment decreased in the first ~~nine~~six months of ~~2017~~2022 compared to 2021 by $19.7 million, or 17.0%, as a result of the factors mentioned above.

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UFP INDUSTRIES, INC.

Industrial Segment

Net sales in the second quarter of 2022 increased 11% compared to the same period of ~~2016, while we reported a 19%~~2021, due to an 11% increase in selling prices and acquisition unit growth of 1%, offset by a 1% decrease in organic unit sales. The increase in our selling prices is a result of executing value-based selling initiatives and maintaining pricing discipline as we operate in an environment of elevated demand and capacity constraints.The components of our change in organic unit sales includes gains associated with $17 million in sales to new customers, $24 million of sales to new locations of existing customers, and $26 million of new product sales. These gains were offset by the loss of unit sales on less profitable accounts.

Gross profits increased by $27.7 million, or 20.6%, for the second quarter of 2022 compared to the same period last year. Acquisitions contributed $1.4 million to the increase in gross profit. The remaining increase is a result of the pricing increases discussed above as well as favorable changes in our value-added sales mix. Excluding acquisitions, we estimate that value-added products contributed $36.5 million to the increase in gross profit, while commodity-based products contributed to a decline of $10.2 million in gross profit. Value-added sales increased to 70.5% of total net sales in the second quarter of 2022 compared to 63.8% of total net sales in the second quarter of 2021. Additionally, the increase in new product sales contributed $11.2 million to gross profits this year ($1.4 million from acquisitions).

SG&A increased by approximately $12.3 million, or 22.5%, in the second quarter of 2022 compared to the same period of 2021. Acquired operations since the second quarter of 2021 contributed approximately $1.0 million to our increase in costs. Accrued bonus expense, which varies with our overall profitability and return on investment, decreased approximately $1.4 million relative to the second quarter of 2021, and totaled ~~$32.6~~$19.7 million infor the ~~nine months of 2017 compared to $33.9 million in 2016. Acquired operations contributed approximately $41 million to our year over year increase.~~quarter. Bonus expense was impacted by the plan modification disclosed above. The remaining increase was primarily due to ~~an increase~~increases in bad debt expense of $6.4 million, sales incentive compensation of $2.0 million, medical benefits expense of $0.6 million, salaries and ~~benefit costs~~wages of $0.4 million, and ~~foreign currency exchange losses.~~ travel related expenses of $0.4 million.

~~INTEREST, NET~~

Earnings from operations for the Industrial reportable segment increased in the second quarter of 2022 compared to 2021 by $14.7 million, or 18.5%, due to the factors discussed above.

Net ~~interest costs were higher~~sales in the ~~third quarter~~first six months of ~~2017~~2022 increased 21% compared to the same period of ~~2016~~2021, due to ~~carrying~~ a ~~higher amount of debt and a slight~~23% increase in ~~short-term borrowing rates.~~selling prices and acquisition unit growth of 1%, offset by a 3% decrease in organic unit sales. The increase in our selling prices is a result of executing value-based selling initiatives and maintaining pricing discipline as we operate in an environment of elevated demand and capacity constraints.The components of our change in organic unit sales includes gains associated with $40 million in sales to new customers, $42 million of sales to new locations of existing customers, and $55 million of new product sales. These gains were offset by the loss of unit sales on less profitable accounts.

Gross profits increased by $96.9 million, or 45.1%, for the first six months of 2022 compared to the same period last year. Acquisitions contributed $3.1 million to the increase in gross profit. The remaining increase is a result of the pricing increases discussed above as well as favorable changes in our value-added sales mix. Excluding acquisitions, we estimate that value-added products and commodity-based products contributed $86.4 million and $7.4 million, respectively, to the increase in gross profit. Value-added sales increased to 69.2% of total net sales in the first six months of 2022 compared to 65.1% of total net sales in the first six months of 2021. Additionally, the increase in new product sales contributed $23 million to gross profits this year ($3.1 million from acquisitions).

SG&A increased by approximately $39.5 million, or 41.5%, in the first six months of 2022 compared to the same period of 2021. Acquired operations since the first six months of 2021 contributed approximately $2.3 million to our increase in costs. Accrued bonus expense, which varies with our overall profitability and return on investment, increased approximately $11.7 million, and totaled $43.4 million for the six months of 2022. Bonus expense was also impacted by the plan modification disclosed above. The remaining increase was primarily due to increases in bad debt expense of $8.0 million, sales incentive compensation of $6.8 million, salaries and wages of $2.0 million, travel related expenses of $1.0 million, and medical benefits expense of $0.7 million.

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UFP INDUSTRIES, INC.

Earnings from operations for the Industrial reportable segment increased in the first six months of 2022 compared to 2021 by $56.7 million, or 47.2%, due to the factors discussed above.

Construction Segment

Net sales in the second quarter of 2022 increased 32% compared to the same period of 2021, due to a 15% increase in selling prices, 2% due to the transfer of certain sales from the Retail segment and organic unit sales growth of 15%. The increase in our selling prices is due to a combination of an improvement in our product mix of value-added products which tend to be sold on a fixed price, elevated end market demand, and selectively selling to maximize profitability. Organic unit changes within this segment consist of increases of 63% in commercial construction, 35% in concrete forming, 16% in factory-built housing, and 1% in site-built construction.

●

The organic increase in commercial is due primarily to an increase in sales at our idX facility in CA. As of June 25, 2022 and December 25, 2021, we estimate that backlog orders associated with commercial construction approximated $118.0 million and $84.6 million, respectively.

●

The organic unit increase in concrete forming is comprised of a 64% increase in our value-added unit sales and a 10% increase in our commodity-based unit sales. The unit increase in value-added sales is due to an increase in concrete form and engineered wood product sales to new customers and existing customers.

●

The organic unit increase in factory-built is primarily due to an increase in industry production and an increase in new products sales of $11.1 million.

●

Capacity constraints impacted our ability to grow our site-built business unit. Consequently we have been selective in the business we take in order to maximize profitability. As of June 25, 2022 and December 25, 2021, we estimate that backlog orders associated with site-built construction approximated $160.6 million and $113.5 million, respectively.

Gross profits increased by $93.0 million, or 69.3%, for the second quarter of 2022 compared to the same period of 2021. The increase in our gross profit was comprised of the following factors:

●

Gross profits in our site-built construction business unit increased by $72.5 million as a result of being more selective in the business that we take during this period of elevated demand and capacity constraints.

●

Gross profits in our factory-built housing business unit increased $10.9 million as a result of increased unit sales and leveraging fixed costs. In addition, value-added sales in this business unit increased to 55.3% of total net sales in the second quarter of 2022 compared to 46.7% of total net sales in the second quarter of 2021. The increase in new product sales contributed $1.8 million in gross profits this year.

●

The gross profit of our commercial construction business unit increased $7.6 million as a result of increased unit sales, better productivity and other operational improvements, and improved pricing discipline.

●

The gross profit of our concrete forming business unit increased by $1.7 million, including $2.9 million as a result of the transfer of sales from the Retail segment.

●

Acquired businesses contributed $0.3 million.

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UFP INDUSTRIES, INC.

SG&A increased by approximately $27.7 million, or 41.4%, in the second quarter of 2022 compared to the same period of 2021. Acquired operations since the second quarter of 2021 contributed approximately $0.3 million to total SG&A for the quarter. Accrued bonus expense, which varies with our overall profitability and return on investment, increased approximately $11.0 million, and totaled $28.7 million for the quarter. Bonus expense was also impacted by previously discussed modifications in our plan. The remaining increase was primarily due to increases in sales incentive compensation of $8.9 million, salaries and wages of $1.3 million, bad debt expense of $1.3 million, and travel related expenses of $0.7 million.

Earnings from operations for the Construction reportable segment increased in the second quarter of 2022 compared to 2021 by $65.7 million, or 97.9%, due to the factors mentioned above.

Net sales in the first six months of 2022 increased 36% compared to the same period of 2021, due to a 20% increase in selling prices, 3% due to the transfer of certain sales from the Retail segment, and organic unit sales growth of 13%. Organic unit changes within this segment consisted of increases of 48% in commercial construction, 26% in concrete forming, and 16% in factory-built housing. The organic unit sales of our site-built business unit remained flat due to capacity constraints.

Gross profits increased by $165.8 million, or 74.3%, for the first six months of 2022 compared to the same period of 2021. The increase in our gross profit was comprised of the following factors:

●

Gross profits in our site-built construction business unit increased by $108.4 million as a result of being more selective in the business that we take during this period of elevated demand and capacity constraints.

●

Gross profits in our factory-built housing business unit increased $36.3 million as a result of increased unit sales and leveraging fixed costs. In addition, value-added sales in this business unit increased to 54.6% of total net sales in the first six months of 2022 compared to 47.5% of total net sales in the first six months of 2021. The increase in new product sales contributed $4.6 million in gross profits this year.

●

The gross profit of our concrete forming business unit increased by $10.2 million, including $6.7 million as a result of the transfer of sales from the Retail segment.

●

The gross profit of our commercial construction business unit increased $9.7 million as a result of increased unit sales, better productivity and other operational improvements, as well as improved pricing discipline.

●

Acquired businesses contributed $1.2 million.

SG&A increased by approximately $54.5 million, or 44.5%, in the first six months of 2022 compared to the same period of 2021. Acquired operations since the first six months of 2021 contributed approximately $1.2 million to total SG&A for the quarter. Accrued bonus expense, which varies with our overall profitability and return on investment, increased approximately $24.6 million, and totaled $51.3 million for the first six months of 2022. Bonus expense was also impacted by previously discussed modifications in our plan. The remaining increase was primarily due to increases in sales incentive compensation of $15.5 million, salaries and wages of $3.4 million, bad debt expense of $2.7 million, and travel related expenses of $1.4 million.

Earnings from operations for the Construction reportable segment increased in the first six months of 2022 compared to 2021 by $111.5 million, or 111.4%, 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.

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UFP INDUSTRIES, INC.

Corporate

The corporate segment consists of over (under) allocated costs that are not significant.

INCOME TAXES

Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for foreign, state and local income taxes and permanent tax differences. Our effective tax rate was ~~31.9~~%25.0% in the ~~third~~second quarter of ~~201~~72022 compared to ~~32.5~~%25.0% for same period in ~~201~~6~~. Our effective tax rate~~ 2021 and was ~~33.0~~%24.5% in the first ~~nine~~six months of ~~201~~72022 compared to ~~34.2% in 2016. The decrease in our effective tax rate is~~ ~~primarily due to recording a tax deduction~~24.4% for ~~certain share-based compensation at fair market value.~~

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

~~SEGMENT REPORTING~~

~~The following table presents, for the periods indicated, our net sales and earnings from operations by reportable segment.~~

Net Sales

Earnings from Operations

Three Months Ended

Three Months Ended


September 30,

September 24,

$

%


September 30,

September 24,

$

%
(in thousands)

2017

2016

    Change

Change

2017

2016

    Change

Change
North

$
310,384

$
267,156

$
43,228

16.2
%

$
16,697

$
14,630

$
2,067

14.1
%
South

206,050

173,715

32,335

18.6
%

10,234

9,900

334

3.4
%
West

378,714

335,981

42,733

12.7
%

22,538

19,962

2,576

12.9
%
All Other

161,438

49,813

111,625

224.1
%

6,882

2,959

3,923

132.6
%
Corporate

—

—

—

—

(4,080)

(3,899)

(181)

4.6
%
Total

$
1,056,586

$
826,665

$
229,921

27.8
%

$
52,271

$
43,552

$
8,719

20.0
%

Net Sales

Earnings from Operations

Nine Months Ended

Nine Months Ended


September 30,

September 24,

$

%


September 30,

September 24,

$

%

(in thousands)

2017

2016

    Change

Change

2017

2016

    Change

Change
North

$
857,858

$
758,066

$
99,792

13.2
%

$
42,921

$
43,054

$
(133)

(0.3)
%
South

616,376

533,239

83,137

15.6
%

31,152

35,830

(4,678)

(13.1)
%
West

1,088,744

940,188

148,556

15.8
%

65,547

58,434

7,113

12.2
%
All Other

412,113

149,416

262,697

175.8
%

13,285

11,542

1,743

15.1
%
Corporate

—

—

—

—

(12,914)

(19,733)

6,819

34.6
%
Total

$
2,975,091

$
2,380,909

$
594,182

25.0
%

$
139,991

$
129,127

$
10,864

8.4
%

~~(1)~~

~~Corporate primarily represents over (under) allocated administrative costs and accrued bonus expense.~~

~~North~~

Net Sales

Net Sales

North Segment by Market

North Segment by Market

Three Months Ended

Nine Months Ended
(in thousands)

September 30,

September 24,



September 30,

September 24,


Market Classification

2017

2016

% Change

2017

2016

% Change
Retail

$
139,284

$
131,333

6.1
%

$
387,925

$
369,699

4.9
%
Industrial

40,192

27,524

46.0
%

114,533

87,287

31.2
%
Construction

137,616

113,897

20.8
%

373,838

316,204

18.2
%
Total Gross Sales

317,092

272,754

16.3
%

876,296

773,190

13.3
%
Sales Allowances

(6,708)

(5,598)

19.8
%

(18,438)

(15,124)

21.9
%
Total Net Sales

$
310,384

$
267,156

16.2
%

$
857,858

$
758,066

13.2
%

~~Note: During 2017, certain customers were reclassified to a different market. Prior year information has been restated to reflect these changes.~~

Net sales attributable to the North reportable segment increased in the third quarter of 2017 compared to 2016 as a result of increased sales to each of our markets primarily due to the same factors previously discussed. Acquired operations contributed $8.7 million to our industrial sales increase.

Earnings from operations for the North reportable segment increased in the third quarter of 2017 by $2.1 million, or 14.1%, due to an increase in gross profit of $2.7 million, offset by a $0.6 million increase in SG&A expenses compared to last year. Acquired operations contributed $0.4 million to our operating profits in the third quarter.

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

Net sales attributable to the North reportable segment increased in the first nine months of 2017 compared to 2016 due to an increase in sales to each of our markets primarily due to the same factors previously discussed. Acquired operations contributed $21.0 million to our industrial sales increase.

Earnings from operations for the North reportable segment decreased in the first nine months of 2017 by $0.1 million, or 0.3%, due to an increase in gross profit of $4.5 million offset by a $4.6 million increase in SG&A expenses compared to last year. Acquired operations contributed $1.4 million to our operating profits in the first nine months of 2017.

~~South~~

Net Sales

Net Sales

South Segment by Market

South Segment by Market

Three Months Ended

Nine Months Ended
(in thousands)

September 30,

September 24,




September 30,

September 24,


Market Classification

2017

2016

% Change

2017

2016

% Change
Retail

$
92,146

$
75,130

22.6
%

$
282,809

$
240,175

17.8
%
Industrial

69,390

61,749

12.4
%

201,928

185,529

8.8
%
Construction

49,054

40,385

21.5
%

145,387

118,223

23.0
%
Total Gross Sales

210,590

177,264

18.8
%

630,124

543,927

15.8
%
Sales Allowances

(4,540)

(3,549)

27.9
%

(13,748)

(10,688)

28.6
%
Total Net Sales

$
206,050

$
173,715

18.6
%

$
616,376

$
533,239

15.6
%

~~Note: During 2017, certain customers were reclassified to a different market. Prior year information has been restated to reflect these changes.~~

Net sales attributable to the South reportable segment increased in the third quarter of 2017 compared to 2016 due to increased sales to all markets primarily due to the same factors previously discussed. Acquired operations contributed $24.4 million and $1.8 million to our growth in sales to the retail and industrial market, respectively.

Earnings from operations for the South reportable segment increased in the third quarter of 2017 by $0.3 million, or 3.4%, due to a increase in gross profit of $0.7 million offset by a $0.4 million increase in SG&A expenses. Acquired operations contributed $0.6 million to our operating profits in the third quarter.

Net sales attributable to the South reportable segment increased in the first nine months of 2017 compared to 2016 due to increased sales to all markets primarily due to the factors previously discussed. Acquired operations contributed $59.9 million of sales growth to our retail market.

Earnings from operations for the South reportable segment decreased in the first nine months of 2017 by $4.7 million, or 13.1%, due to a decrease in gross profit of $3.1 million and an increase of $1.6 million in SG&A expenses. The decrease in gross profit was primarily due to the impact of the volatility in lumber prices. Acquired operations contributed $2.0 million to our operating profits in the first nine months of 2017.

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

~~West~~

Net Sales

Net Sales

West Segment by Market

West Segment by Market

Three Months Ended

Nine Months Ended

(in thousands)

September 30,

September 24,



September 30,

September 24,


Market Classification

2017

2016

% Change

2017

2016

% Change

Retail

$
115,069

$
99,762

15.3
%

$
347,270

$
298,723

16.3
%

Industrial

145,132

126,836

14.4
%

401,850

347,902

15.5
%

Construction

123,026

113,488

8.4
%

353,238

305,962

15.5
%

Total Gross Sales

383,227

340,086

12.7
%

1,102,358

952,587

15.7
%

Sales Allowances

(4,513)

(4,105)

9.9
%

(13,614)

(12,399)

9.8
%

Total Net Sales

$
378,714

$
335,981

12.7
%

$
1,088,744

$
940,188

15.8
%

~~Note: During 2017, certain customers were reclassified to a different market. Prior year information has been restated to reflect these changes.~~

~~Net sales attributable to the West reportable segment increased in the third quarter of 2017 compared to 2016 due to increases in sales to all markets primarily due to factors previously discussed.~~

~~Earnings from operations for the West reportable segment increased in the third quarter of 2017 by $2.6 million, or 12.9%, compared to~~ the same period in ~~2016 due~~2021. Permanent tax differences and credits have remained relatively consistent from 2021 to ~~a $2.5 million increase in gross profit combined with a $0.1 million decrease in SG&A expenses.~~

~~Net sales attributable to~~2022, which is the ~~West reportable segment~~primary reason the rate increased ~~in the first nine months of 2017 compared to 2016 due to an increase in sales to all markets due to the same factors previously discussed.~~ only slightly.

Earnings from operations for the West reportable segment increased in the first nine months of 2017 by $7.1 million, or 12.2%, compared to the same period in 2016 due to a $10.8 million increase in gross profit, offset by a $3.7 million increase in SG&A expenses.

~~All Other~~

Net Sales

Net Sales

All Other Segment by Market

All Other Segment by Market

Three Months Ended

Nine Months Ended

(in thousands)

September 30,

September 24,



September 30,

September 24,



Market Classification

2017

2016

% Change

2017

2016

% Change

Retail

$
45,396

$
33,049

37.4
%

$
144,782

$
109,606

32.1
%

Industrial

114,792

15,907

621.6
%

264,364

41,000

544.8
%

Construction

331

4

8,175.0
%

533

4

13,225.0
%

Total Gross Sales

160,519

48,960

227.9
%

409,679

150,610

172.0
%

Sales Allowances & Other

919

853

7.7
%

2,434

(1,194)

(303.9)
%

Total Net Sales

$
161,438

$
49,813

224.1
%

$
412,113

$
149,416

175.8
%

~~Our All Other reportable segment consists of our Alternative Materials, International, idX, and certain other segments which are not significant.~~

Net sales attributable to All Other reportable segments increased in the third quarter of 2017 compared to 2016 due to increases in sales to the retail and industrial markets. Our increase in sales to the industrial market was primarily due to an $89.3 million increase from businesses we acquired since September of 2016.

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

Earnings from operations for All Other reportable segments increased during the third quarter of 2017 by $3.9 million, or 132.6%, compared to the same period of 2016. During the third quarter of 2017, gross profit dollars increased $20.6 million, offset by an increase in SG&A expenses of $16.1 million compared to the same period of 2016. Businesses we acquired contributed $3.7 million to our earnings from operations during the third quarter of 2017.

Net sales attributable to All Other reportable segments increased in the first nine months of 2017 compared to 2016 due to increases in sales to the retail and industrial markets. Our increase in sales to the industrial market was primarily due to a $203.1 million increase from businesses we acquired since September of 2016.

Earnings from operations for All Other reportable segments increased during the first nine months of 2017 by $1.7 million, or 15.1%, compared to the same period of 2016. During the first nine months of 2017, gross profit dollars increased $48.4 million, offset by an increase in SG&A expenses of $46.7 million compared to the same period of 2016. Businesses we acquired since September of 2016 contributed $1.1 million to the earnings from operations increase in the first nine months of 2017.

OFF-BALANCE SHEET TRANSACTIONS

We have no significant off-balance sheet ~~transactions other than operating leases.~~transactions.

LIQUIDITY AND CAPITAL RESOURCES

The table below presents, for the periods indicated, a summary of our cash flow statement (in thousands):


	Nine Months Ended
	September 30,		September 24,
	2017		2016
Cash from operating activities	$	97,350	$	136,377

					Six Months Ended
					June 25,		June 26,
					2022		2021
Cash from (used in) operating activities					$	90,397	$	(115,733)
Cash used in investing activities		(121,375)		(200,139)		(118,763)		(513,998)
Cash from (used in) financing activities		11,230		13,981
Cash (used in) from financing activities						(125,013)		237,926
Effect of exchange rate changes on cash		1,255		(969)		956		112
Net change in all cash and cash equivalents		(11,540)		(50,750)		(152,423)		(391,693)
Cash, cash equivalents, and restricted cash, beginning of period		34,489		88,342		291,223		436,608
Cash, cash equivalents, and restricted cash, end of period	$	22,949	$	37,592	$	138,800	$	44,915

In general, we ~~funded~~fund our growth ~~in the past~~ through a combination of operating cash flows, our revolving credit facility, industrial development bonds (when circumstances permit), 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. 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 ~~August.~~September. Consequently, our working capital increases during our first and second quarters ~~resulting~~which typically results in negative or modest cash flows from operations during those periods. Conversely, we typically 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.

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UFP INDUSTRIES, INC.

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 payables outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle increased to 4951 days from 4448 days during the ~~third~~second quarter ~~and increased to 52 days from 47 in the first nine months~~ of ~~2017~~2022 compared to the prior ~~periods, due to the impact of~~year period.


	Three Months Ended				Six Months Ended
	June 25,		June 26,		June 25,		June 26,
	2022		2021		2022		2021
Days of sales outstanding		34		33		33		33
Days supply of inventory		35		33		38		35
Days payables outstanding		(18)		(18)		(19)		(19)
Days in cash cycle		51		48		52		49

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

~~acquired operations which carry comparatively higher investments~~The increase in ~~inventory than our other operations. Excluding acquired operations~~ our cash cycle ~~was 44 days~~ in the ~~third~~second quarter of ~~2017 and 47~~2022 compared to the same period of 2021 was primarily due to a two day increase in our days supply of inventory as well as a one day increase in our receivables cycle. The increase in our cash cycle in the first ~~nine~~six months of ~~2017.~~2022 compared to the same period of 2021 was primarily due to a three day increase in our days supply of inventory. The increases in our days supply of inventory are generally due to carrying greater amounts of safety stock due to supply and transportation constraints.

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2017

2016

2017

2016

Days of sales outstanding


31


31


31


31

Days supply of inventory

38

34

41

37

Days payables outstanding

(20)

(21)

(20)

(21)

Days in cash cycle

49

44

52

47

InOur cash flows from operations for the first ~~nine~~six months of ~~2017, our~~2022 increased to $90 million compared to $116 million of cash ~~from operating activities was $97.3 million, which was comprised~~used in operations during the first six months of 2021. This improvement in operational cash flows is due to net earnings ~~of $90.9~~and non-cash expenses totaling $475 million, ~~and $41.3~~compared to $328 million ~~of non-cash expenses,~~last year, offset by a ~~$34.9~~$385 million increase in ~~cash invested in~~net working capital since the end of ~~December 2016 due~~last year, compared to ~~the strong sales growth and higher lumber prices. Comparatively, cash from operating activities was $136.4~~a $444 million increase in the ~~first nine months~~prior year. Last year, our inventories increased more significantly from the beginning of ~~2016, which was comprised of net earnings of $83.3 million and $32.3 million of non-cash expenses, offset by a $20.8 million seasonal decrease in working capital since~~the year until the end of ~~2015. The increase in working capital compared to the same period last year was~~June primarily due to ~~significant increases~~an increase in ~~inventory and accounts receivable offset by increases in accounts payable~~lumber prices, which ~~can be attributed to sales growth and higher lumber prices.~~remained elevated at the end of the second quarter.

~~Acquisitions and purchases~~Purchases of property, plant, and equipment and acquisitions (refer to Note F for Business Combinations) comprised most of our cash used in investing activities during the first ~~nine~~six months of ~~2017~~2022 and totaled ~~$59.9~~$71.7 million and ~~$57.2~~$39.3 million, respectively. Net purchases of investments totaled $6.9 million. Total proceeds from the sales of property, plant, and equipment were $2.0 million. Outstanding purchase commitments on existing capital projects totaled approximately ~~$26.1~~$80.4 million on ~~September 30, 2017. We currently plan~~June 25, 2022. Capital spending primarily consists of several projects to ~~spend $70 million for the year~~expand capacity to manufacture new and value-added products, achieve efficiencies through automation, make improvements to a number of facilities, and increase our transportation capacity (tractors, trailers) in ~~2017 on capital expenditures.~~order to meet higher volumes and replace older rolling stock. We intend to fund capital expenditures and purchase commitments through our operating cash flows for the balance of the year. ~~Comparatively,~~We currently plan to spend between $175 million to $225 million on capital ~~expenditures were $35.7 million during~~projects for the ~~first nine months of 2016. The increase in our capital expenditures in 2017 is primarily~~year with variability due to uncertainty about supplier lead times. Notable areas of capital spending include projects to increase the ~~additional requirements~~capacity and efficiency of our ~~recently acquired operations~~plants that produce our Deckorators mineral-based composite and ~~an increase in~~wood-plastic composite decking and our ~~“expansionary~~UFP Edge siding, pattern and ~~efficiency” capital expenditures tied to initiatives including new~~trim products, ~~value-added product~~expand the capacity ~~expansion,~~of machine-built pallet and ~~automation. The sale~~site-built business units, and ~~purchase~~take advantage of ~~investments totaling $12.2 million and $4.2 million, respectively, are due to investment activity in our captive insurance subsidiary.~~automation opportunities.

Cash flows from financing activities ~~primarily~~ consisted of ~~net borrowings~~cash paid for repurchases of common stock of $90.8 million. We repurchased approximately 1.21 million shares of our common stock for $93.2 million for the year at an average share price of $77.06, of which $90.8 million was paid in cash and the remaining $2.4 million was accrued. The total number of remaining shares that may be repurchased under ~~our revolving credit facility of~~the program is approximately ~~$36.2 million, primarily to finance the $59.9 million of acquisitions we completed in~~1.4 million. Dividends paid during the first ~~nine~~six months of ~~2017. Additionally,~~2022 include first quarter dividends of $12.5 million ($0.20 per share) and second quarter dividends of $15.5 million ($0.25 per share). On July 20, 2022, the Board approved a quarterly dividend payment of $0.25 per share, payable on September 15, 2022, to shareholders of record on September 1, 2022. Net repayments of debt were approximately $2.9 million and distributions to noncontrolling interests were $2.1 million. We have debt maturities of $38.7 million due in December of this year which we intend to repay through operating cash flows and available cash balances.

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UFP INDUSTRIES, INC.

On June 25, 2022, we had ~~$9.2 million in dividend payments and $13.0 million in payments for stock repurchases.~~

~~On September 30, 2017, we had $70.8~~$7.2 million outstanding on our ~~$295~~$550 million revolving credit ~~facility. The outstanding revolving credit~~ facility, ~~also includes letters of credit totaling~~and we had approximately ~~$9.8 million on September 30, 2017; as a result, we have approximately $224.2~~$535.7 million in remaining availability ~~on our revolver~~ after considering $7.1 million in outstanding letters of credit. ~~Additionally, we have $150 million in availability under a “shelf agreement” for long term debt with a current lender.~~ 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 30, 2017.~~June 25, 2022.

At the end of the second quarter of 2022, we have approximately $1.2 billion in total liquidity, consisting of our net cash surplus and remaining availability under our revolving credit facility and a shelf agreement with certain lenders providing up to $500 million in 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

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

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 ~~31, 2016.~~25, 2021.

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 use 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 would be 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, 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.~~Dollar. Additionally, certain of our operations enter into transactions that will be settled in a currency other than the U.S. Dollar. We ~~have entered~~may enter into forward foreign exchange rate contracts in ~~2017 and may enter into further forward contracts in~~ the future ~~associated with mitigating the~~to mitigate foreign currency exchange risk. Historically, our hedge contracts are deemed immaterial to the financial statements, however any material hedge contract in the future will be disclosed.

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UFP INDUSTRIES, INC.

Item 4. Controls and Procedures.

(a)

Evaluation of Disclosure Controls and Procedures. With the participation of management, our chief executive officer and chief financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15e and 15d – 15e) as of the quarter ended ~~September 30, 2017~~June 25, 2022 (the “Evaluation Date”), have concluded that, as of such date, our disclosure controls and procedures were effective.

(b)

Changes in Internal Controls. During the quarter ended ~~September 30, 2017,~~June 25, 2022, there were no changes in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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~~UNIVERSAL FOREST PRODUCTS, INC.~~

PART II. OTHER INFORMATION

Item 1A. Risk Factors.

None

~~None.~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a)

None.

(b)

None.

(c)

Issuer purchases of equity securities.


Fiscal Month	(a)	(b)	(c)	(d)
March 27 – April 30, 2022	755,558	77.40	755,558	1,803,958
May 1 – 28, 2022	363,659	77.54	363,659	1,440,299
May 29 – June 25, 2022	46,051	65.00	46,051	1,394,248

Fiscal Month

(a)

(b)

(c)

(d)
July 2 - August 5, 2017

2,800

84.01

—

2,755,923
August 6 - September 2, 2017

34,900

80.40

—

2,721,023
September 3 - September 30, 2017

—

—

—

2,721,023

(a)

~~(a)~~

Total number of shares purchased.

(b)

~~(b)~~

Average price paid per share.

(c)

~~(c)~~

Total number of shares purchased as part of publicly announced plans or programs.

(d)

~~(d)~~

Maximum number of shares that may yet be purchased under the plans or programs.

On November 14, 2001, the Board of Directors approved a share repurchase program (which succeeded a previous program) allowing us to repurchase up to 2.5 million shares of our common stock. On October 14, ~~2011,~~2010, our Board authorized ~~an additional~~ 2 million shares to be repurchased under our share repurchase program. On February 15, 2022, our Board authorized an additional 1.5 million shares to be repurchased under our existing share repurchase program. The total number of remaining shares that may be repurchased under the program is approximately ~~2.8~~1.4 million.

Item 5. Other Information.

None.

2935

Table of Contents

~~UNIVERSAL FOREST PRODUCTS,~~UFP INDUSTRIES, INC.

PART II. OTHER INFORMATION

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:


31	Certifications.

	(a)	Certificate of the Chief Executive Officer of ~~Universal Forest Products,~~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 ~~Universal Forest Products,~~UFP Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32	Certifications.

	(a)	Certificate of the Chief Executive Officer of ~~Universal Forest Products,~~UFP Industries, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

	(b)	Certificate of the Chief Financial Officer of ~~Universal Forest Products,~~UFP Industries, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

101	Interactive Data ~~File.~~File formatted in iXBRL (Inline eXtensible Business Reporting Language).

	(INS)	~~XBRL~~iXBRL Instance Document.

	(SCH)	~~XBRL~~iXBRL Schema Document.

	(CAL)	~~XBRL~~iXBRL Taxonomy Extension Calculation Linkbase Document.

	(LAB)	~~XBRL~~iXBRL Taxonomy Extension Label Linkbase Document.

	(PRE)	~~XBRL~~iXBRL Taxonomy Extension Presentation Linkbase Document.

	(DEF)	~~XBRL~~iXBRL Taxonomy Extension Definition Linkbase Document.

104	Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document).

3036

Table of Contents

~~UNIVERSAL FOREST PRODUCTS,~~UFP INDUSTRIES, INC.

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.

	~~UNIVERSAL FOREST PRODUCTS,~~UFP INDUSTRIES, INC.

Date: ~~November 1, 2017~~August 3, 2022	By:	/s/ Matthew J. Missad
	Matthew J. Missad,
	Chief Executive Officer and Principal Executive Officer


Date: ~~November 1, 2017~~August 3, 2022	By:	/s/ Michael R. Cole
	Michael R. Cole,
	Chief Financial Officer,
	Principal Financial Officer and
	Principal Accounting Officer

3137


	Michigan		~~38‑1465835~~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)


Large Accelerated Filer ☒⌧	Accelerated Filer ☐◻	Non-Accelerated Filer ☐◻	Smaller ~~reporting company~~ Reporting Company ☐
			Emerging Growth Company ☐

~~PART I.~~				~~FINANCIAL INFORMATION.~~	~~Page No.~~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, no par value	~~Item 1.~~UFPI	~~Financial Statements~~The Nasdaq Stock Market, LLC


(in thousands, except per share data)
	Three Months Ended				Nine Months Ended
	September 30,		September 24,		September 30,		September 24,
	2017		2016		2017		2016
NET SALES	$	1,056,586	$	826,665	$	2,975,091	$	2,380,909
COST OF GOODS SOLD		911,899		708,611		2,561,424		2,028,629
GROSS PROFIT		144,687		118,054		413,667		352,280
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		92,416		74,502		273,676		223,153
EARNINGS FROM OPERATIONS		52,271		43,552		139,991		129,127
INTEREST EXPENSE		1,481		1,096		4,825		3,274
INTEREST INCOME		(130)		(119)		(541)		(431)
EQUITY IN EARNINGS OF INVESTEE		1		(50)		(25)		(241)
		1,352		927		4,259		2,602
EARNINGS BEFORE INCOME TAXES		50,919		42,625		135,732		126,525
INCOME TAXES		16,250		13,861		44,855		43,268
NET EARNINGS		34,669		28,764		90,877		83,257
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST		(976)		(945)		(2,480)		(2,828)
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST	$	33,693	$	27,819	$	88,397	$	80,429

EARNINGS PER SHARE - BASIC	$	1.65	$	1.36	$	4.32	$	3.95
EARNINGS PER SHARE - DILUTED	$	1.64	$	1.36	$	4.31	$	3.94

OTHER COMPREHENSIVE INCOME:
NET EARNINGS		34,669		28,764		90,877		83,257
OTHER COMPREHENSIVE GAIN (LOSS)		1,719		(1,156)		6,141		(1,521)
COMPREHENSIVE INCOME		36,388		27,608		97,018		81,736
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		(975)		(495)		(3,862)		(1,576)
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST	$	35,413	$	27,113	$	93,156	$	80,160


(in thousands, except per share data)
	Three Months Ended				Six Months Ended
	June 25,		June 26,		June 25,		June 26,
	2022		2021		2022		2021
NET SALES	$	2,900,874	$	2,700,541	$	5,390,187	$	4,525,545
COST OF GOODS SOLD		2,397,422		2,279,247		4,408,372		3,817,697
GROSS PROFIT		503,452		421,294		981,815		707,848
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		214,538		184,539		434,688		334,637
OTHER GAINS, NET		3,348		(180)		2,536		(1,211)
EARNINGS FROM OPERATIONS		285,566		236,935		544,591		374,422
INTEREST EXPENSE		3,395		3,899		6,697		7,050
INTEREST AND INVESTMENT LOSS (INCOME)		4,154		(1,689)		5,247		(3,985)
EQUITY IN EARNINGS OF INVESTEE		1,017		835		1,532		1,465
		8,566		3,045		13,476		4,530
EARNINGS BEFORE INCOME TAXES		277,000		233,890		531,115		369,892
INCOME TAXES		69,147		58,530		130,131		90,281
NET EARNINGS		207,853		175,360		400,984		279,611
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST		(4,735)		(1,978)		(8,163)		(2,918)
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST	$	203,118	$	173,382	$	392,821	$	276,693

EARNINGS PER SHARE – BASIC	$	3.24	$	2.79	$	6.25	$	4.46
EARNINGS PER SHARE – DILUTED	$	3.23	$	2.78	$	6.22	$	4.45

OTHER COMPREHENSIVE INCOME:
NET EARNINGS		207,853		175,360		400,984		279,611
OTHER COMPREHENSIVE GAIN (LOSS)		(4,383)		2,720		(1,199)		524
COMPREHENSIVE INCOME		203,470		178,080		399,785		280,135
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		(4,640)		(2,698)		(9,017)		(3,112)
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST	$	198,830	$	175,382	$	390,768	$	277,023


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	NONE
	(Former name or former address, if changed since last report.)


	Class		Outstanding as of ~~September 30, 2017~~June 25, 2022
	Common stock, $1 par value		~~20,391,399~~61,622,527

PART I.		FINANCIAL INFORMATION.	Page No.

		Item 1.	Financial Statements	3

		Condensed Consolidated ~~Condensed~~ Balance Sheets at ~~September 30, 2017,~~June 25, 2022, December ~~31, 2016~~25, 2021 and ~~September 24, 2016~~June 26, 2021	3


		Condensed Consolidated ~~Condensed~~ Statements of Earnings and Comprehensive Income for the Three and Six Months Ended June 25, 2022 and ~~Nine Months Ended September 30, 2017 and September 24, 2016~~June 26, 2021	4


		Condensed Consolidated ~~Condensed~~ Statements of Shareholders’ Equity for the ~~Nine~~Three and Six Months Ended ~~September 30, 2017~~June 25, 2022 and ~~September 24, 2016~~June 26, 2021	5


		Condensed Consolidated ~~Condensed~~ Statements of Cash Flows for the ~~Nine~~Three and Six Months Ended ~~September 30, 2017~~June 25, 2022 and ~~September 24, 2016~~June 26, 2021	6
			7

		Notes to Unaudited Condensed Consolidated ~~Condensed~~ Financial Statements	7
			8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
			18

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28
			34

	Item 4.	Controls and Procedures	28
			35
~~PART II.~~		~~OTHER INFORMATION~~
PART II.		OTHER INFORMATION

	Item 1.	Legal Proceedings – NONE

	Item 1A.	Risk Factors –- NONE	29
			35

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
			35

	Item 3.	Defaults upon Senior Securities – NONE

	Item 4.	Mine Safety Disclosures – NONE

	Item 5.	Other Information – NONE	29
			35

	Item 6.	Exhibits	30 36


(in thousands, except share data)
	September 30,		December 31,		September 24,
	2017		2016		2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	22,044	$	34,091	$	36,683
Restricted cash		905		398		909
Investments		10,781		10,348		10,453
Accounts receivable, net		419,183		282,253		343,771
Inventories:
Raw materials		203,930		198,954		180,740
Finished goods		208,556		198,273		189,188
Total inventories		412,486		397,227		369,928
Refundable income taxes		763		11,459		7,407
Other current assets		22,438		20,662		21,636
TOTAL CURRENT ASSETS		888,600		756,438		790,787
DEFERRED INCOME TAXES		1,899		1,546		2,416
RESTRICTED INVESTMENTS		7,982		—		—
OTHER ASSETS		7,634		8,617		8,757
GOODWILL		212,029		198,535		207,832
INDEFINITE-LIVED INTANGIBLE ASSETS		7,580		2,340		2,340
OTHER INTANGIBLE ASSETS, NET		36,093		26,731		14,014
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment		754,175		699,462		717,287
Less accumulated depreciation and amortization		(429,066)		(401,611)		(432,796)
PROPERTY, PLANT AND EQUIPMENT, NET		325,109		297,851		284,491
TOTAL ASSETS		1,486,926		1,292,058		1,310,637
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Cash overdraft	$	26,617	$	19,761	$	13,940
Accounts payable		171,774		124,660		137,979
Accrued liabilities:
Compensation and benefits		88,185		92,441		99,549
Other		50,179		32,281		57,104
Current portion of long-term debt		2,197		2,634		1,584
TOTAL CURRENT LIABILITIES		338,952		271,777		310,156
LONG-TERM DEBT		145,884		109,059		110,362
DEFERRED INCOME TAXES		22,806		20,817		14,066
OTHER LIABILITIES		29,204		29,939		28,963
TOTAL LIABILITIES		536,846		431,592		463,547
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 80,000,000; issued and outstanding, 20,391,399, 20,342,069 and 20,330,939		20,391		20,342		20,331
Additional paid-in capital		200,778		185,333		183,962
Retained earnings		715,497		649,135		637,536
Accumulated other comprehensive income		(871)		(5,630)		(4,854)
Total controlling interest shareholders’ equity		935,795		849,180		836,975
Noncontrolling interest		14,285		11,286		10,115
TOTAL SHAREHOLDERS’ EQUITY		950,080		860,466		847,090
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,486,926	$	1,292,058	$	1,310,637


(in thousands, except share and per share data)
	Controlling Interest Shareholders’ Equity
							Accumulated
			Additional				Other
	Common		Paid-In		Retained		Comprehensive		Noncontrolling
	Stock		Capital		Earnings		Earnings		Interest		Total
Balance at December 26, 2015	$	20,142	$	171,562	$	565,636	$	(4,585)	$	13,654	$	766,409
Net earnings						80,429				2,828		83,257
Foreign currency translation adjustment								(620)		(1,252)		(1,872)
Unrealized gain (loss) on investment & foreign currency								351				351
Distributions to noncontrolling interest										(3,160)		(3,160)
Purchases of noncontrolling interest				855						(1,955)		(1,100)
Cash dividends $0.420 per share						(8,529)						(8,529)
Issuance of 5,195 shares under employee stock plans		5		390								395
Issuance of 133,293 shares under stock grant programs		133		5,143								5,276
Issuance of 50,742 shares under deferred compensation plans		51		(51)								—
Expense associated with share-based compensation arrangements				1,568								1,568
Accrued expense under deferred compensation plans				4,495								4,495
Balance at September 24, 2016	$	20,331	$	183,962	$	637,536	$	(4,854)	$	10,115	$	847,090
Balance at December 31, 2016		20,342		185,333		649,135		(5,630)		11,286		860,466
Net earnings						88,397				2,480		90,877
Foreign currency translation adjustment								4,325		1,382		5,707
Unrealized gain (loss) on investment & foreign currency								434				434
Distributions to noncontrolling interest										(3,272)		(3,272)
Additional purchases of noncontrolling interest										2,409		2,409
Cash dividends - $0.450 per share						(9,208)						(9,208)
Issuance of 5,975 shares under employee stock plans		6		470								476
Issuance of 142,775 shares under stock grant programs		143		7,037								7,180
Issuance of 49,160 shares under deferred compensation plans		49		(49)								—
Repurchase of 148,580 shares		(149)				(12,827)						(12,976)
Expense associated with share-based compensation arrangements				1,978								1,978
Accrued expense under deferred compensation plans				6,009								6,009
Balance at September 30, 2017	$	20,391	$	200,778	$	715,497	$	(871)	$	14,285	$	950,080


(in thousands)	Nine Months Ended
	September 30,		September 24,
	2017		2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	90,877	$	83,257
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation		36,010		29,014
Amortization of intangibles		3,549		1,868
Expense associated with share-based compensation arrangements		1,978		1,568
Expense associated with stock grant plans		144		105
Deferred income taxes (credits)		117		(53)
Equity in earnings of investee		(25)		(241)
Net (gain) loss on disposition and impairment of assets		(437)		94
Changes in:
Accounts receivable		(121,688)		(69,357)
Inventories		(820)		21,683
Accounts payable and cash overdraft		53,424		35,026
Accrued liabilities and other		34,221		33,413
NET CASH FROM OPERATING ACTIVITIES		97,350		136,377
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(57,189)		(35,723)
Proceeds from sale of property, plant and equipment		2,121		516
Acquisitions, net of cash received		(59,859)		(66,615)
Repayments of debt of acquiree		—		(92,830)
Purchase of remaining noncontrolling interest, net of cash received		—		(1,100)
Cash contributed from noncontrolling interest		464		—
Advances of notes receivable		(234)		(5,400)
Collections on notes receivable		1,334		5,819
Purchases of investments		(12,155)		(4,468)
Proceeds from sale of investments		4,227		1,395
Other		(84)		(1,733)
NET CASH USED IN INVESTING ACTIVITIES		(121,375)		(200,139)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		610,038		52,479
Repayments under revolving credit facilities		(573,829)		(27,177)
Proceeds from issuance of common stock		476		396
Dividends paid to shareholders		(9,207)		(8,529)
Distributions to noncontrolling interest		(3,272)		(3,160)
Repurchase of common stock		(12,976)		—
Other		—		(28)
NET CASH FROM (USED IN) FINANCING ACTIVITIES		11,230		13,981
Effect of exchange rate changes on cash		1,255		(969)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(11,540)		(50,750)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR		34,489		88,342
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	$	22,949	$	37,592

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Cash and cash equivalents, beginning of period	$	34,091	$	87,756
Restricted cash, beginning of period		398		586
Cash, cash equivalents, and restricted cash, beginning of period	$	34,489	$	88,342

Cash and cash equivalents, end of period	$	22,044	$	36,683
Restricted cash, end of period		905		909
Cash, cash equivalents, and restricted cash, end of period	$	22,949	$	37,592

SUPPLEMENTAL INFORMATION:
Interest paid	$	3,910	$	2,587
Income taxes paid		34,108		43,384
NON-CASH FINANCING ACTIVITIES:
Common stock issued under deferred compensation plans		4,673		3,657


	September 30, 2017						September 24, 2016
	Quoted		Prices with				Quoted		Prices with
	Prices in		Other				Prices in		Other
	Active		Observable				Active		Observable
	Markets		Inputs				Markets		Inputs
(in thousands)	(Level 1)		(Level 2)		Total		(Level 1)		(Level 2)		Total
Money market funds	$	64	$	413	$	477	$	64	$	132	$	196
Fixed income funds		1,299		6,905		8,204		2,049		2,335		4,384
Equity securities		10,194		—		10,194		5,592		—		5,592
Mutual funds:
Domestic stock funds		335		—		335		760		—		760
International stock funds		87		—		87		70		—		70
Target funds		260		—		260		234		—		234
Bond funds		208		—		208		203		—		203
Total mutual funds		890		—		890		1,267		—		1,267
Total	$	12,447	$	7,318	$	19,765	$	8,972	$	2,467	$	11,439
Assets at fair value	$	12,447	$	7,318	$	19,765	$	8,972	$	2,467	$	11,439


	June 25, 2022								June 26, 2021
	Quoted		Prices with						Quoted		Prices with
	Prices in		Other			Prices with			Prices in		Other			Prices with
	Active		Observable			Unobservable			Active		Observable			Unobservable
	Markets		Inputs			Inputs			Markets		Inputs			Inputs
	(Level 1)		(Level 2)			(Level 3)	Total		(Level 1)		(Level 2)			(Level 3)	Total
Money market funds	$	19	$	4,170	$	—	$	4,189	$	19	$	2,840	$	—	$	2,859
Fixed income funds		2,684		16,654		—		19,338		244		17,610		—		17,854
Treasury securities		342		—		—		342		307		—		—		307
Equity securities		17,249		—		—		17,249		19,014		—		—		19,014
Alternative investments		—		—		4,079		4,079		—		—		3,304		3,304
Mutual funds:
Domestic stock funds		12,723		—		—		12,723		10,037		—		—		10,037
International stock funds		1,378		—		—		1,378		1,463		—		—		1,463
Target funds		21		—		—		21		22		—		—		22
Bond funds		134		—		—		134		145		—		—		145
Alternative funds		510		—		—		510		501		—		—		501
Total mutual funds		14,766		—		—		14,766		12,168		—		—		12,168
Total	$	35,060	$	20,824	$	4,079	$	59,963	$	31,752	$	20,450	$	3,304	$	55,506
Assets at fair value	$	35,060	$	20,824	$	4,079	$	59,963	$	31,752	$	20,450	$	3,304	$	55,506


			Unrealized
	Cost		Gain/(Loss)		Fair Value

							June 25, 2022						June 26, 2021
									Unrealized						Unrealized
							Cost		Gain		Fair Value		Cost		Gain		Fair Value
Fixed Income	$	8,170	$	34	$	8,204	$	20,875	$	(1,537)	$	19,338	$	17,066	$	788	$	17,854
Treasury Securities								342		—		342		—		—		—
Equity		9,123		1,071		10,194		15,668		1,581		17,249		14,760		4,254		19,014
Mutual Funds								13,405		742		14,147		8,769		2,740		11,509
Alternative Investments								3,053		1,026		4,079		2,953		351		3,304
Total	$	17,293	$	1,105	$	18,398	$	53,343	$	1,812	$	55,155	$	43,548	$	8,133	$	51,681


	Three Months Ended				Nine Months Ended
	September 30,		September 24,		September 30,		September 24,
	2017		2016		2017		2016
Shares for calculating basic EPS - Post stock split basis		60,225		60,186		60,309		60,108
Shares for calculating diluted EPS - Post stock split basis		60,348		60,285		60,420		60,204
Net earnings per share (post stock split):
Basic	$	0.55	$	0.45	$	1.44	$	1.32
Diluted	$	0.55	$	0.45	$	1.44	$	1.31

Quality Hardwood Sales, LLC ("Quality")	A manufacturer and supplier of hardwood products, including components of cabinets used in homes and recreational vehicles. Quality has annual sales of approximately $30 million. The acquisition of Quality enabled us to expand our product offering to include hardwood-based products.
	November 29, 2016	$9,455 cash paid for 100% stock purchase	$	7,314	$	2,141	All Other
The UBEECO Group Pty. Ltd. ("Ubeeco")	A manufacturer and distributor of a variety of wood packaging and alternative material products, including boxes, crates, pallets, skids, protective packaging, packaging accessories and loose lumber. Ubeeco has annual sales of approximately $20 million. The acquisition of Ubeeco allows us to make progress on our goal of becoming a global provider of packaging solutions.
	September 16, 2016	$66,691 cash paid for 100% stock purchase which includes $11,337 in net cash received. Also, paid $86,294 to retire outstanding debt and $6,536 of certain other obligations.	$	17,455	$	49,236	All Other
idX Holdings, Inc. ("idX")	A designer, producer, and installer of customized interior fixtures and related products used in a variety of commercial structures. idX has annual sales of $300 million. The acquisition of idX enables us to enhance our design, product and service offering to become a tier 1 supplier of interior fixtures to retail customers, and continue to use idX's capabilities to continue to develop new markets for growth. Our goal is to achieve long-term synergies, including:
	a.	Eliminating redundant administrative support costs.
	b.	Using the scale advantage of the Company to reduce material costs of common raw materials.
	c.	Utilizing manufacturing capacity of certain existing locations to supply idX.
	d.	Utilizing idX’s international footprint to identify sourcing opportunities for certain products.
	e.	Cross selling one another’s products and services with our respective customers.
	f.	Collaborating on new product development.
	July 29, 2016	$1,246 cash paid for asset purchase	$	405	$	841	North
Seven D Truss, L.P.	A manufacturer and distributor of roof and floor trusses. 7D had annual sales of approximately $4.0 million. The acquisition of 7D gave us the opportunity to consolidate operations with our Gordon, Pennsylvania location.


					Net
Company	Acquisition		Intangible		Tangible		Operating
Name	Date	Purchase Price	Assets		Assets		Segment
	September 27, 2021	$6,443 cash paid for 100% asset purchase and estimated contingent consideration	$	4,039	$	2,404	Construction
Shelter Products, Inc. (Shelter)	Based in Haleyville, Alabama, Shelter operates its distribution and logistics business from an 87,800 sq.-ft. warehouse that specializes in manufactured housing industry customers. Shelter’s facility is adjacent to a UFP manufacturing facility that supplies trusses to manufactured housing builders, and the proximity will enable additional operational synergies. The Company had sales of approximately $11.4 million in 2020.


	Three Months Ended September 30, 2017
	North		South		West		All Other		Corporate		Total
Net sales to outside customers	$	310,384	$	206,050	$	378,714	$	161,438	$	—	$	1,056,586
Intersegment net sales		18,897		18,817		21,384		47,539		—		106,637
Segment operating profit		16,697		10,234		22,538		6,882		(4,080)		52,271


	Three Months Ended September 24, 2016
	North		South		West		All Other		Corporate		Total
Net sales to outside customers	$	267,156	$	173,715	$	335,981	$	49,813	$	—	$	826,665
Intersegment net sales		14,318		9,642		22,054		4,574		—		50,588
Segment operating profit		14,630		9,900		19,962		2,959		(3,899)		43,552


	Nine Months Ended September 30, 2017
	North		South		West		All Other		Corporate		Total
Net sales to outside customers	$	857,858	$	616,376	$	1,088,744	$	412,113	$	—	$	2,975,091
Intersegment net sales		51,859		55,472		65,466		116,743		—		289,540
Segment operating profit (loss)		42,921		31,152		65,547		13,285		(12,914)		139,991


	Nine Months Ended September 24, 2016
	North		South		West		All Other		Corporate		Total
Net sales to outside customers	$	758,066	$	533,239	$	940,188	$	149,416	$	—	$	2,380,909
Intersegment net sales		42,071		28,693		65,325		16,559		—		152,648
Segment operating profit		43,054		35,830		58,434		11,542		(19,733)		129,127


	Random Lengths Composite
	Average $/MBF
	2017			2016
January	$	356		$	316
February		393			310
March		401			321
April		424			345
May		416			356
June		399			353
July		411			351
August		417			367
September		416			354

Third quarter average	$	415		$	357
Year-to-date average	$	404		$	341

Third quarter percentage change		16.2	%
Year-to-date percentage change		18.5	%


	Random Lengths SYP
	Average $/MBF
	2017			2016
January	$	397		$	358
February		420			357
March		433			366
April		438			389
May		416			397
June		399			382
July		381			380
August		383			391
September		387			375

Third quarter average	$	384		$	382
Year-to-date average	$	406		$	377

Third quarter percentage change		0.5	%
Year-to-date percentage change		7.7	%


	New Product Sales by Market					New Product Sales by Market
	Three Months Ended					Nine Months Ended
(in thousands)	September 30,		September 24,			September 30,		September 24,
Market Classification	2017		2016		% Change	2017		2016		% Change
Retail	$	65,383		53,252	22.78%	$	192,194	$	153,966	24.83%
Industrial		26,738		23,374	14.39%		76,125		65,642	15.97%
Construction		15,577		11,911	30.78%		45,321		35,717	26.89%
Total New Product Sales		107,698		88,537	21.64%		313,640		255,325	22.84%