UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended ~~June 25, 2022~~July 1, 2023


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

Commission File Number 0-22684

UFP INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)


	Michigan		38-1465835
	(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification Number)
	organization)

	2801 East Beltline NE, Grand Rapids, Michigan		49525
	(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (616) 364-6161


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

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ⌧	Accelerated Filer ◻	Non-Accelerated Filer ◻	Smaller Reporting Company ☐
			Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


	Class		Outstanding as of ~~June 25, 2022~~July 1, 2023
	Common stock, $1 par value		~~61,622,527~~61,865,006


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	UFPI	The Nasdaq Stock Market, LLC

Table of Contents

UFP INDUSTRIES, INC.

TABLE OF CONTENTS

PART I.		FINANCIAL INFORMATION.	Page No.

	Item 1.	Financial Statements	3

		Condensed Consolidated Balance Sheets at July 1, 2023, December 31, 2022 and June 25, 2022 ~~December 25, 2021 and June 26, 2021~~	3

		Condensed Consolidated Statements of Earnings and Comprehensive Income for the Three and Six Months Ended July 1, 2023 and June 25, 2022 ~~and June 26, 2021~~	4

		Condensed Consolidated Statements of Shareholders’ Equity for the ~~Three and~~ Six Months Ended July 1, 2023 and June 25, 2022 ~~and June 26, 2021~~	5

		Condensed Consolidated Statements of Cash Flows for the ~~Three and~~ Six Months Ended July 1, 2023 and June 25, 2022 ~~and June 26, 2021~~	7

		Notes to Unaudited Condensed Consolidated Financial Statements	8

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

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3436

	Item 4.	Controls and Procedures	3537

PART II.		OTHER INFORMATION

	Item 1.	Legal Proceedings – NONE

	Item 1A.	Risk Factors - NONE	3537

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3537

	Item 3.	Defaults upon Senior Securities – NONE

	Item 4.	Mine Safety Disclosures – NONE

	Item 5.	Other Information ~~– NONE~~	3537

	Item 6.	Exhibits	3638

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(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


(in thousands, except share data)	July 1,		December 31,		June 25,
	2023		2022		2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	702,148	$	559,397	$	138,071
Restricted cash		761		226		729
Investments		38,459		36,013		35,475
Accounts receivable, net		802,300		617,604		1,046,543
Inventories:
Raw materials		334,300		398,798		490,923
Finished goods		486,887		574,429		615,379
Total inventories		821,187		973,227		1,106,302
Refundable income taxes		13,717		33,126		13,083
Other current assets		36,486		42,520		36,241
TOTAL CURRENT ASSETS		2,415,058		2,262,113		2,376,444
DEFERRED INCOME TAXES		4,187		3,750		3,568
RESTRICTED INVESTMENTS		22,756		19,898		19,885
RIGHT OF USE ASSETS		105,907		107,517		107,825
OTHER ASSETS		96,079		101,262		32,186
GOODWILL		336,495		337,320		320,532
INDEFINITE-LIVED INTANGIBLE ASSETS		7,330		7,339		7,350
OTHER INTANGIBLE ASSETS, NET		138,117		143,892		117,869
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment		1,447,482		1,379,968		1,286,037
Less accumulated depreciation and amortization		(729,468)		(690,986)		(660,873)
PROPERTY, PLANT AND EQUIPMENT, NET		718,014		688,982		625,164
TOTAL ASSETS		3,843,943		3,672,073		3,610,823
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Cash overdraft	$	—	$	—	$	11,926
Accounts payable		264,408		206,941		386,833
Accrued liabilities:
Compensation and benefits		183,910		296,120		252,723
Other		79,414		80,255		107,112
Current portion of lease liability		25,887		25,577		24,903
Current portion of long-term debt		2,385		2,942		40,496
TOTAL CURRENT LIABILITIES		556,004		611,835		823,993
LONG-TERM DEBT		274,821		275,154		276,315
LEASE LIABILITY		84,194		85,419		86,464
DEFERRED INCOME TAXES		51,018		51,265		63,389
OTHER LIABILITIES		36,137		44,697		35,594
TOTAL LIABILITIES		1,002,174		1,068,370		1,285,755
TEMPORARY EQUITY:
Redeemable noncontrolling interest	$	6,772	$	6,880	$	—
SHAREHOLDERS’ EQUITY:
Controlling interest shareholders’ equity:
Preferred stock, no par value; shares authorized 1,000,000; issued and outstanding, none	$	—	$	—	$	—
Common stock, $1 par value; shares authorized 160,000,000; issued and outstanding, 61,865,006, 61,618,193 and 61,622,527		61,865		61,618		61,623
Additional paid-in capital		335,494		294,029		275,061
Retained earnings		2,408,314		2,217,410		1,950,922
Accumulated other comprehensive loss		(2,290)		(9,075)		(7,458)
Total controlling interest shareholders’ equity		2,803,383		2,563,982		2,280,148
Noncontrolling interest		31,614		32,841		44,920
TOTAL SHAREHOLDERS’ EQUITY		2,834,997		2,596,823		2,325,068
TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ EQUITY	$	3,843,943	$	3,672,073	$	3,610,823

See notes to consolidated condensed financial statements.

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

AND COMPREHENSIVE INCOME

(Unaudited)


(in thousands, except per share data)									Three Months Ended				Six Months Ended
	Three Months Ended				Six Months Ended
	June 25,		June 26,		June 25,		June 26,		July 1,		June 25,		July 1,		June 25,
	2022		2021		2022		2021		2023		2022		2023		2022
NET SALES	$	2,900,874	$	2,700,541	$	5,390,187	$	4,525,545	$	2,043,918	$	2,900,874	$	3,866,394	$	5,390,187
COST OF GOODS SOLD		2,397,422		2,279,247		4,408,372		3,817,697		1,643,851		2,397,422		3,107,998		4,408,372
GROSS PROFIT		503,452		421,294		981,815		707,848		400,067		503,452		758,396		981,815
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		214,538		184,539		434,688		334,637		204,703		214,538		399,386		434,688
OTHER GAINS, NET		3,348		(180)		2,536		(1,211)
OTHER LOSSES (GAINS), NET										1,867		3,348		3,805		2,536
EARNINGS FROM OPERATIONS		285,566		236,935		544,591		374,422		193,497		285,566		355,205		544,591
INTEREST EXPENSE		3,395		3,899		6,697		7,050		3,275		3,395		6,393		6,697
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
INTEREST AND INVESTMENT (INCOME) LOSS										(7,717)		4,154		(14,264)		5,247
EQUITY IN LOSS OF INVESTEE										417		1,017		1,005		1,532
		8,566		3,045		13,476		4,530		(4,025)		8,566		(6,866)		13,476
EARNINGS BEFORE INCOME TAXES		277,000		233,890		531,115		369,892		197,522		277,000		362,071		531,115
INCOME TAXES		69,147		58,530		130,131		90,281		46,734		69,147		85,705		130,131
NET EARNINGS		207,853		175,360		400,984		279,611		150,788		207,853		276,366		400,984
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST		(4,735)		(1,978)		(8,163)		(2,918)
NET (EARNINGS) LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST										(27)		(4,735)		464		(8,163)
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST	$	203,118	$	173,382	$	392,821	$	276,693	$	150,761	$	203,118	$	276,830	$	392,821

EARNINGS PER SHARE – BASIC	$	3.24	$	2.79	$	6.25	$	4.46	$	2.40	$	3.24	$	4.41	$	6.25
EARNINGS PER SHARE – DILUTED	$	3.23	$	2.78	$	6.22	$	4.45	$	2.36	$	3.23	$	4.35	$	6.22

OTHER COMPREHENSIVE INCOME:
NET EARNINGS		207,853		175,360		400,984		279,611		150,788		207,853		276,366		400,984
OTHER COMPREHENSIVE GAIN (LOSS)		(4,383)		2,720		(1,199)		524
OTHER COMPREHENSIVE INCOME (LOSS)										4,478		(4,383)		10,730		(1,199)
COMPREHENSIVE INCOME		203,470		178,080		399,785		280,135		155,266		203,470		287,096		399,785
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		(4,640)		(2,698)		(9,017)		(3,112)
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST										(1,721)		(4,640)		(3,481)		(9,017)
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST	$	198,830	$	175,382	$	390,768	$	277,023	$	153,545	$	198,830	$	283,615	$	390,768

See notes to consolidated condensed financial statements.

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

(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 26, 2021

$
61,902

$
243,995

$
1,678,121

$
(5,405)

$
37,956

$
2,016,569
Net earnings





189,703



3,428


193,131
Foreign currency translation adjustment







2,930

949


3,879
Unrealized loss on debt securities







(695)



(695)
Distributions to noncontrolling interest









(2,053)

(2,053)
Cash dividends - $0.20 per share - quarterly

(12,541)





(12,541)
Issuance of 9,734 shares under employee stock purchase plan

10

653







663
Issuance of 787,045 shares under stock grant programs

787

8,959







9,746
Issuance of 79,973 shares under deferred compensation plans

80

(80)







—
Repurchase of 44,442 shares

(45)

(3,499)






(3,544)
Expense associated with share-based compensation arrangements

6,883





6,883
Accrued expense under deferred compensation plans

6,134








6,134
Balance on March 26, 2022

$
62,734

$
266,544

$
1,851,784

$
(3,170)

$
40,280

$
2,218,172
Net earnings

203,118

4,735

207,853
Foreign currency translation adjustment

(3,660)

(95)

(3,755)
Unrealized loss on debt securities

(628)

(628)
Cash dividends - $0.25 per share - quarterly

(15,474)

(15,474)
Issuance of 13,875 shares under employee stock plans

14

781

795
Issuance of 28,154 shares under stock grant programs

28

1,092

1,120
Issuance of 11,605 shares under deferred compensation plans

12

(12)

—
Repurchase of 1,165,268 shares

(1,165)

(88,506)

(89,671)
Expense associated with share-based compensation arrangements

5,556

5,556
Accrued expense under deferred compensation plans

1,100

1,100
Balance on June 25, 2022

$
61,623

$
275,061

$
1,950,922

$
(7,458)

$
44,920

$
2,325,068


(in thousands, except share and per share data)
	Controlling Interest Shareholders’ Equity
							Accumulated
			Additional				Other
	Common		Paid-In		Retained		Comprehensive		Noncontrolling				Temporary
	Stock		Capital		Earnings		Earnings		Interest (NCI)		Total		Equity
Balance on December 31, 2022	$	61,618	$	294,029	$	2,217,410	$	(9,075)	$	32,841	$	2,596,823	$	6,880
Net earnings (loss)						126,069				(313)		125,756		(178)
Foreign currency translation adjustment								3,850		2,195		6,045		56
Unrealized gain on debt securities								151				151
Distributions to NCI										(4,859)		(4,859)
Other												—		43
Cash dividends - $0.25 per share - quarterly						(15,642)						(15,642)
Issuance of 10,140 shares under employee stock purchase plan		10		675								685
Issuance of 824,669 shares under stock grant programs		825		14,356		6						15,187
Issuance of 93,165 shares under deferred compensation plans		93		(93)								—
Repurchase of 450,597 shares		(450)				(34,818)						(35,268)
Expense associated with share-based compensation arrangements				9,598								9,598
Accrued expense under deferred compensation plans				7,165								7,165
Balance on April 1, 2023	$	62,096	$	325,730	$	2,293,025	$	(5,074)	$	29,864	$	2,705,641	$	6,801
Net earnings (loss)						150,761				56		150,817		(29)
Foreign currency translation adjustment								2,983		1,694		4,677
Unrealized gain on debt securities								(199)				(199)
Other				(427)								(427)
Cash dividends - $0.25 per share - quarterly						(15,507)						(15,507)
Issuance of 9,253 shares under employee stock purchase plan		9		754								763
Net forfeitures of 1,503 shares under stock grant programs		(1)		35								34
Issuance of 11,686 shares under deferred compensation plans		12		(12)								—
Repurchase of 250,000 shares		(251)				(19,965)						(20,216)
Expense associated with share-based compensation arrangements				8,201								8,201
Accrued expense under deferred compensation plans				1,213								1,213
Balance on July 1, 2023	$	61,865	$	335,494	$	2,408,314	$	(2,290)	$	31,614	$	2,834,997	$	6,772

See notes to consolidated condensed financial statements.

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY, CONTINUED

(Unaudited)

(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


(in thousands, except share and per share data)
	Controlling Interest Shareholders’ Equity
							Accumulated
			Additional				Other
	Common		Paid-In		Retained		Comprehensive		Noncontrolling				Temporary
	Stock		Capital		Earnings		Earnings		Interest (NCI)		Total		Equity
Balance on December 25, 2021	$	61,902	$	243,995	$	1,678,121	$	(5,405)	$	37,956	$	2,016,569	$	—
Net earnings						189,703				3,428		193,131
Foreign currency translation adjustment								2,930		949		3,879
Unrealized loss on debt securities								(695)				(695)
Distributions to NCI										(2,053)		(2,053)
Cash dividends - $0.20 per share - quarterly						(12,541)						(12,541)
Issuance of 9,734 shares under employee stock purchase plan		10		653								663
Issuance of 787,045 shares under stock grant programs		787		8,959								9,746
Issuance of 79,973 shares under deferred compensation plans		80		(80)								—
Repurchase of 44,442 shares		(45)				(3,499)						(3,544)
Expense associated with share-based compensation arrangements				6,883								6,883
Accrued expense under deferred compensation plans				6,134								6,134
Balance on March 26, 2022	$	62,734	$	266,544	$	1,851,784	$	(3,170)	$	40,280	$	2,218,172	$	—
Net earnings						203,118				4,735		207,853
Foreign currency translation adjustment								(3,660)		(95)		(3,755)
Unrealized loss on debt securities								(628)				(628)
Cash dividends - $0.25 per share - quarterly						(15,474)						(15,474)
Issuance of 13,875 shares under employee stock purchase plan		14		781								795
Issuance of 28,154 shares under stock grant programs		28		1,092								1,120
Issuance of 11,605 shares under deferred compensation plans		12		(12)								—
Repurchase of 1,165,268 shares		(1,165)				(88,506)						(89,671)
Expense associated with share-based compensation arrangements				5,556								5,556
Accrued expense under deferred compensation plans				1,100								1,100
Balance on June 25, 2022	$	61,623	$	275,061	$	1,950,922	$	(7,458)	$	44,920	$	2,325,068	$	—

See notes to consolidated condensed financial statements.

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UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED 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


(in thousands)	Six Months Ended
	July 1,			June 25,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	276,366		$	400,984
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation		52,786			44,034
Amortization of intangibles		10,371			8,740
Expense associated with share-based and grant compensation arrangements		17,875			12,542
Deferred income taxes		(319)			179
Unrealized (gain) loss on investments and other		(1,291)			6,181
Equity in loss of investee		1,005			1,532
Net (gain) loss on sale and disposition of assets		(182)			766
Changes in:
Accounts receivable		(183,717)	��		(304,715)
Inventories		154,413			(134,653)
Accounts payable and cash overdraft		56,899			56,120
Accrued liabilities and other		(63,142)			(1,313)
NET CASH FROM OPERATING ACTIVITIES		321,064			90,397
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(84,981)			(71,675)
Proceeds from sale of property, plant and equipment		789			2,029
Acquisitions, net of cash received and purchase of equity method investment		67			(39,343)
Purchases of investments		(14,747)			(15,166)
Proceeds from sale of investments		11,486			8,221
Other		2,076			(2,829)
NET CASH USED IN INVESTING ACTIVITIES		(85,310)			(118,763)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		11,026			570,700
Repayments under revolving credit facilities		(11,869)			(571,075)
Repayments of debt		(29)			(2,485)
Contingent consideration payments and other		(6,179)			(2,553)
Proceeds from issuance of common stock		1,448			1,457
Dividends paid to shareholders		(31,149)			(28,015)
Distributions to noncontrolling interest		(4,859)			(2,053)
Repurchase of common stock		(55,484)			(90,805)
Other		48			(184)
NET CASH USED IN FINANCING ACTIVITIES		(97,047)			(125,013)
Effect of exchange rate changes on cash		4,579			956
NET CHANGE IN CASH AND CASH EQUIVALENTS		143,286			(152,423)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR		559,623			291,223
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	$	702,909		$	138,800

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Cash and cash equivalents, beginning of period	$	559,397		$	286,662
Restricted cash, beginning of period		226			4,561
Cash, cash equivalents, and restricted cash, beginning of period	$	559,623		$	291,223

Cash and cash equivalents, end of period	$	702,148		$	138,071
Restricted cash, end of period		761			729
Cash, cash equivalents, and restricted cash, end of period	$	702,909		$	138,800

SUPPLEMENTAL INFORMATION:
Interest paid	$	6,345		$	7,008
Income taxes paid		66,329			138,420
NON-CASH INVESTING ACTIVITIES
Capital expenditures included in accounts payable	$	1,915		$	2,856
NON-CASH FINANCING ACTIVITIES:
Common stock issued under deferred compensation plans	$	8,929		$	7,563

See notes to consolidated condensed financial statements.

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UFP INDUSTRIES, INC.

NOTES TO UNAUDITED

CONDENSED CONSOLIDATED 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 the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United ~~States.~~States of America. All significant intercompany ~~transactions~~balances and ~~balances~~transactions have been ~~eliminated.~~eliminated in consolidation.

We consolidate entities in which we have a controlling financial interest. In determining whether we have a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity (“VIE”) and whether we are the primary beneficiary. The primary beneficiary of a VIE is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. The primary beneficiary is required to consolidate the VIE. We account for unconsolidated VIEs using the equity method of accounting.

In our opinion, the Financial Statements contain all material adjustments necessary to present fairly our consolidated financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. These Financial Statements should be read in conjunction with the annual consolidated financial statements, and footnotes thereto, included in our Annual Report to Shareholders on Form 10-K for the fiscal year ended December ~~25, 2021.~~31, 2022.

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 June ~~26, 2021~~25, 2022 balances in the accompanying unaudited condensed consolidated 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~~.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.~~years and is being applied prospectively to all business combinations occurring after this date.

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UFP INDUSTRIES, INC.

B. FAIR VALUE

We apply the provisions of ASC 820, Fair Value Measurements and Disclosures, to assets and liabilities measured at fair value. Assets measured at fair value are as follows (in thousands):


	June 25, 2022								June 26, 2021								July 1, 2023								June 25, 2022
	Quoted		Prices with						Quoted		Prices with						Quoted		Prices with						Quoted		Prices with
	Prices in		Other			Prices with			Prices in		Other			Prices with			Prices in		Other			Prices with			Prices in		Other			Prices with
	Active		Observable			Unobservable			Active		Observable			Unobservable			Active		Observable			Unobservable			Active		Observable			Unobservable
	Markets		Inputs			Inputs			Markets		Inputs			Inputs			Markets		Inputs			Inputs			Markets		Inputs			Inputs
	(Level 1)		(Level 2)			(Level 3)	Total		(Level 1)		(Level 2)			(Level 3)	Total		(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	$	431,829	$	4,434	$	—	$	436,263	$	19	$	4,170	$	—	$	4,189
Fixed income funds		2,684		16,654		—		19,338		244		17,610		—		17,854		3,791		18,195		—		21,986		2,684		16,654		—		19,338
Treasury securities		342		—		—		342		307		—		—		307		343		—		—		343		342		—		—		342
Equity securities		17,249		—		—		17,249		19,014		—		—		19,014		17,224		—		—		17,224		17,249		—		—		17,249
Alternative investments		—		—		4,079		4,079		—		—		3,304		3,304		—		—		4,076		4,076		—		—		4,079		4,079
Mutual funds:
Domestic stock funds		12,723		—		—		12,723		10,037		—		—		10,037		10,781		—		—		10,781		12,723		—		—		12,723
International stock funds		1,378		—		—		1,378		1,463		—		—		1,463		1,135		—		—		1,135		1,378		—		—		1,378
Target funds		21		—		—		21		22		—		—		22		8		—		—		8		21		—		—		21
Bond funds		134		—		—		134		145		—		—		145		5,288		—		—		5,288		134		—		—		134
Alternative funds		510		—		—		510		501		—		—		501		474		—		—		474		510		—		—		510
Total mutual funds		14,766		—		—		14,766		12,168		—		—		12,168		17,686		—		—		17,686		14,766		—		—		14,766
Total	$	35,060	$	20,824	$	4,079	$	59,963	$	31,752	$	20,450	$	3,304	$	55,506	$	470,873	$	22,629	$	4,076	$	497,578	$	35,060	$	20,824	$	4,079	$	59,963
Assets at fair value	$	35,060	$	20,824	$	4,079	$	59,963	$	31,752	$	20,450	$	3,304	$	55,506

From the assets measured at fair value as of ~~June 25, 2022,~~July 1, 2023, listed in the table above, ~~$35.5~~$435.8 million of money market funds are held in Cash and Cash Equivalents, $38.5 million of mutual funds, equity securities, and alternative investments are held in Investments, $0.5 million of money market and mutual funds are held in Other Assets for our deferred compensation plan, and $22.3 million of fixed income funds and $0.5 million of money market funds are held in Restricted Investments. As of June 25, 2022, $35.5 million of mutual funds, equity securities, and alternative investments were held in Investments, $4.0 million of money market funds ~~are~~were held in Cash and Cash Equivalents, $0.6 million of money market and mutual funds ~~are~~were held in Other Assets for our deferred compensation plan, and $19.7 million of fixed income funds and $0.2 million of money market funds ~~are~~were held in Restricted Investments.

We maintain money market, mutual funds, bonds, and/or equity securities in our non-qualified deferred compensation plan, our wholly owned licensed captive insurance company, and assets held in financial institutions. These funds are valued at prices quoted in an active exchange market and are included in “Cash and Cash Equivalents”, “Investments”, “Other Assets”, and “Restricted Investments”. We have elected not to apply the fair value option under ASC 825, Financial Instruments, to any of our financial instruments except for those expressly required by U.S. GAAP.

In accordance with our investment policy, our wholly-owned captive, Ardellis Insurance Ltd. (“Ardellis”), maintains an investment portfolio, totaling $60.8 million and $55.2 million as of July 1, 2023 and June 25, 2022, respectively, which has been included in the aforementioned table of total investments. This portfolio consists of domestic and international equity securities, alternative investments, and fixed income bonds.

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UFP INDUSTRIES, INC.

Ardellis’ available for sale investment portfolio, including funds held with the State of Michigan, consists of the following (in thousands):


	June 25, 2022						June 26, 2021						July 1, 2023						June 25, 2022
			Unrealized						Unrealized						Unrealized						Unrealized
	Cost		Gain		Fair Value		Cost		Gain		Fair Value		Cost		Gain (Loss)		Fair Value		Cost		Gain (Loss)		Fair Value
Fixed Income	$	20,875	$	(1,537)	$	19,338	$	17,066	$	788	$	17,854
Treasury Securities		342		—		342		—		—		—
Fixed income													$	24,080	$	(2,094)	$	21,986	$	20,875	$	(1,537)	$	19,338
Treasury securities														343		—		343		342		—		342
Equity		15,668		1,581		17,249		14,760		4,254		19,014		14,834		2,390		17,224		15,668		1,581		17,249
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
Mutual funds														15,563		1,596		17,159		13,405		742		14,147
Alternative investments														3,158		918		4,076		3,053		1,026		4,079
Total	$	53,343	$	1,812	$	55,155	$	43,548	$	8,133	$	51,681	$	57,978	$	2,810	$	60,788	$	53,343	$	1,812	$	55,155

Our fixed income investments consist of a blend of US Government and Agency bonds and investment grade corporate bonds with varying maturities. Our equity investments consist of small, mid, and large cap growth and value funds, as well as international equity. Our mutual fund investments consist of domestic and international stock. Our alternative investments consist of a private real estate income trust which is valued as a Level 3 asset. The net pre-tax unrealized gain of the portfolio was $2.8 million and $1.8 ~~million.~~million as of July 1, 2023 and June 25, 2022, respectively. Carrying amounts above are recorded in the investments and restricted investments line items within the balance sheet as of July 1, 2023 and June 25, ~~2022 and June 26, 2021.~~2022.

C. REVENUE RECOGNITION

Within the 3three primary segments, ~~(Retail, Industrial,~~UFP Retail Solutions (“Retail”), UFP Packaging (“Packaging” and ~~Construction)~~formerly known as UFP Industrial) and UFP Construction (“Construction”), that the Company operates, there are a variety of written agreements governing the sale of our products and services. The transaction price is stated at the purchase order level, which includes shipping and/or freight costs and any applicable governmental authority taxes. The majority of our contracts have a single performance obligation concentrated around the delivery of goods to the carrier, Free On Board (FOB) shipping point. Therefore, revenue is recognized when this performance obligation is satisfied. Generally, title and control passes at the time of shipment. In certain circumstances, the customer takes title when the shipment arrives at the destination. However, our shipping process is typically completed the same day.

Certain customer products that we provide require installation by the Company or a third party. Installation revenue is recognized upon completion. If we use a third party for installation, the party will act as an agent to us until completion of the installation. Installation revenue represents an immaterial share of our total net sales.

We utilize rebates, credits, discounts and/or cash-based incentives with certain customers which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration. The allocation of these costs are applied at the invoice level and recognized in conjunction with revenue. Additionally, returns and refunds are estimated on a historical and expected basis which is a reduction of revenue recognized.

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UFP INDUSTRIES, INC.

Earnings on construction contracts are reflected in operations using over time accounting, under either cost to cost or units of delivery methods, depending on the nature of the business at individual operations, which is in accordance with ASC 606 as revenue is recognized when certain performance obligations are performed. Under over time accounting using the cost to cost method, revenues and related earnings on construction contracts are measured by the relationships of actual costs incurred relative to the total estimated costs. Under over time accounting using the units of delivery method, revenues and related earnings on construction contracts are measured by the relationships of actual units produced relative to the total number of units. Revisions in earnings estimates on the construction contracts are recorded in the accounting period in which the basis for such revisions becomes known. Projected losses on individual contracts are charged to operations in their entirety when such losses become apparent.

~~Table of Contents~~

~~UFP INDUSTRIES, INC.~~

Our construction contracts are generally entered into with a fixed price, and completion of the projects can range from 6 to 18 months in duration. Therefore, our operating results are impacted by, among many other things, labor rates and commodity costs. During the year, we update our estimated costs to complete our projects using current labor and commodity costs and recognize losses to the extent that they exist.

The following table presents our net sales disaggregated by revenue source (in thousands):


	Three Months Ended					Six Months Ended					Three Months Ended					Six Months Ended
	June 25,		June 26,			June 25,		June 26,			July 1,		June 25,			July 1,		June 25,
	2022		2021		% Change	2022		2021		% Change	2023		2022		% Change	2023		2022		% Change
Point in Time Revenue	$	2,850,409	$	2,669,159	6.8%	$	5,300,690	$	4,466,558	18.7%	$	2,006,319	$	2,850,409	(29.6)%	$	3,790,775	$	5,300,690	(28.5)%
Over Time Revenue		50,465		31,382	60.8%		89,497		58,987	51.7%		37,599		50,465	(25.5)%		75,619		89,497	(15.5)%
Total Net Sales		2,900,874		2,700,541	7.4%	$	5,390,187	$	4,525,545	19.1%		2,043,918		2,900,874	(29.5)%	$	3,866,394	$	5,390,187	(28.3)%

The Construction segment comprises the construction contract revenue shown above. Construction contract revenue is primarily made up of site-built and framing customers.

The following table presents the balances of over time accounting accounts which are included in “Other current assets” and “Accrued liabilities: Other”, respectively (in thousands):


	June 25,		December 25,		June 26,		July 1,		December 31,		June 25,
	2022		2021		2021		2023		2022		2022
Cost and Earnings in Excess of Billings	$	6,413	$	5,602	$	4,201	$	3,266	$	6,798	$	6,413
Billings in Excess of Cost and Earnings		10,046		10,744		8,239		12,914		10,184		10,046

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UFP INDUSTRIES, INC.

D. EARNINGS PER SHARE

The computation of earnings per share (“EPS”) is as follows (in thousands):


	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 25,		June 26,		June 25,		June 26,		July 1,		June 25,		July 1,		June 25,
	2022		2021		2022		2021		2023		2022		2023		2022
Numerator:
Net earnings attributable to controlling interest	$	203,118	$	173,382	$	392,821	$	276,693	$	150,761	$	203,118	$	276,830	$	392,821
Adjustment for earnings allocated to non-vested restricted common stock		(8,270)		(5,670)		(15,045)		(8,807)
Adjustment for earnings allocated to non-vested restricted common stock equivalents										(7,588)		(8,270)		(13,096)		(15,045)
Net earnings for calculating EPS	$	194,848	$	167,712	$	377,776	$	267,886	$	143,173	$	194,848	$	263,734	$	377,776
Denominator:
Weighted average shares outstanding		62,766		62,242		62,889		62,087		62,786		62,766		62,756		62,889
Adjustment for non-vested restricted common stock		(2,555)		(2,035)		(2,409)		(1,976)
Adjustment for non-vested restricted common stock equivalents										(3,160)		(2,555)		(2,969)		(2,409)
Shares for calculating basic EPS		60,211		60,207		60,480		60,111		59,626		60,211		59,787		60,480
Effect of dilutive restricted common stock		205		156		220		121
Effect of dilutive restricted common stock equivalents										918		205		885		220
Shares for calculating diluted EPS		60,416		60,363		60,700		60,232		60,544		60,416		60,672		60,700
Net earnings per share:
Basic	$	3.24	$	2.79	$	6.25	$	4.46	$	2.40	$	3.24	$	4.41	$	6.25
Diluted	$	3.23	$	2.78	$	6.22	$	4.45	$	2.36	$	3.23	$	4.35	$	6.22

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~~UFP INDUSTRIES, INC.~~

E. COMMITMENTS, CONTINGENCIES, AND GUARANTEES

We are self-insured for environmental impairment liability, including certain liabilities which are insured through a wholly owned subsidiary, Ardellis Insurance Ltd., a licensed captive insurance company.

In addition, on ~~June 25, 2022,~~July 1, 2023, we were parties either as plaintiff or defendant to a number of lawsuits and claims arising through the normal course of our business. In the opinion of management, our consolidated financial statements will not be materially affected by the outcome of these contingencies and claims.

On ~~June 25, 2022,~~July 1, 2023, we had outstanding purchase commitments on commenced capital projects of approximately ~~$80.4~~$66.4 million.

We provide a variety of warranties for products we manufacture. Historically, warranty claims have not been material. We also distribute products manufactured by other ~~companies, some of which are no longer in business.~~companies. While we do not warrant these products, we have received claims as a distributor of these products when the manufacturer no longer exists or has the ability to pay. Historically, these costs have not had a material effect on our consolidated financial statements.

As part of our operations, we supply building materials and labor to site-built construction projects or we jointly bid on contracts with framing companies for such projects. In some instances, we are required to post payment and performance bonds to ensure the products and installation services are completed in accordance with our contractual obligations. We have agreed to indemnify the surety for claims properly made against these bonds. As of ~~June 25, 2022,~~July 1, 2023, we had approximately ~~$13.8~~$13.2 million in outstanding payment and performance bonds for open projects. We had approximately ~~$26.7~~$13.0 million in payment and performance bonds outstanding for completed projects which are still under warranty.

On ~~June 25, 2022,~~July 1, 2023, we had outstanding letters of credit totaling ~~$60.0~~$54.1 million, primarily related to certain insurance contracts, ~~and~~ industrial development revenue bonds, and other debt agreements described further below.

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UFP INDUSTRIES, INC.

In lieu of cash deposits, we provide irrevocable letters of credit in favor of our insurers and other third parties to guarantee our performance under certain insurance ~~contracts.~~contracts and other legal agreements. As of ~~June 25, 2022,~~July 1, 2023, we have irrevocable letters of credit outstanding totaling approximately ~~$50.1~~$50.8 million for these types of ~~insurance~~ arrangements. We have reserves recorded on our balance sheet, in accrued liabilities, that reflect our expected future liabilities under ~~these~~those insurance arrangements.

We are required to provide irrevocable letters of credit in favor of the bond trustees for all industrial development revenue bonds that have been issued. These letters of credit guarantee principal and interest payments to the bondholders. We currently have irrevocable letters of credit outstanding totaling approximately ~~$7.1~~$3.3 million related to our outstanding industrial development revenue bonds. These letters of credit have varying terms but may be renewed at the option of the issuing banks.

Certain wholly owned domestic subsidiaries have guaranteed the indebtedness of UFP Industries, Inc. in certain debt agreements, including the Series 2012, 2018 and 2020 Senior Notes and our revolving credit facility. The maximum exposure of these guarantees is limited to the indebtedness outstanding under these debt arrangements and this exposure will expire concurrent with the expiration of the debt agreements.

We did not enter into any new guarantee arrangements during the second quarter of ~~2022~~2023 which would require us to recognize a liability on our balance sheet.

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~~UFP INDUSTRIES, INC.~~

F. BUSINESS COMBINATIONS AND EQUITY METHOD INVESTMENTS

We completed the following acquisitions ~~in fiscal 2022 and~~ since the end of ~~June 2021,~~the second quarter of 2022, which were accounted for using the purchase or equity method. Dollars below are in thousands unless otherwise noted:

Net

Company

Acquisition

Intangible

Tangible

Operating

Acquisition

Intangible

Tangible

Operating

Name

Date

Purchase Price

Assets

Segment

Date

Purchase Price

Assets

Segment

May 9, 2022

$15,386
cash paid for 100% asset purchase

4,801

10,585

Retail

December 6, 2022

$70,942 cash paid for 100% asset purchase

48,745

22,197

Packaging

Cedar Poly, LLC

Located in Tipton, Iowa, Cedar Poly is a full-service recycler of high-density and low-density polyethylene (HDPE and LDPE) flakes and pellets used in various products, including composite decking. The company also recycles corrugate and operates its own transportation fleet. Cedar Poly had 2021 sales of approximately $17.3 million and will operate in UFP’s Deckorators business unit.

Titan Corrugated, Inc. (Titan) and All Boxed Up, LLC

Located in Flower Mound, TX and founded in 2003, Titan’s primary products include boxes used in moving and storage, jumbo boxes for industrial products, corrugated shipping containers, and point-of-purchase displays. All Boxed Up distributes common box sizes manufactured by Titan throughout the United States. The combined companies had trailing 12-month sales through October 2022 of approximately $46.5 million.

December 27, 2021

$24,057
cash paid for 100% stock purchase, net of acquired cash

17,484

6,573

Retail

June 27, 2022

$69,791 cash paid for equity method investment

34,552

35,239

Packaging

Ultra Aluminum Manufacturing, Inc. (Ultra)

Located in Howell, Michigan and founded in 1996, Ultra is a leading manufacturer of aluminum fencing, gates and railing. The company designs and produces an extensive selection of ornamental aluminum fence and railing products for contractors, landscapers, fence dealers and wholesalers. The Company had sales of approximately $45 million in 2021.

December 20, 2021

$20,754
cash paid for 100% stock purchase

11,417

9,337

Industrial

Advantage Labels & Packaging, Inc. (Advantage)

Based in Grand Rapids, Michigan, Advantage provides blank and customized labels, printers, label applicators and other packaging supplies. Key industries served by the company include beer and beverage; body armor; food production and processing; greenhouse and nursery; hobby and craft; manufacturing; and automotive. The company had trailing 12-month sales through November 2021 of approximately $19.8 million.

November 22, 2021

$11,155
cash paid for 70% stock purchase

9,562

1,593

Other

Ficus Pax Private Limited (Ficus)

Headquartered in Bangalore, India, Ficus manufactures mixed-material cases and crates, nail-less plywood boxes, wooden pallets and other packaging products through 10 facilities located in major industrial markets throughout southern India. Ficus also owns a majority stake in Wadpack, a manufacturer of corrugated fiber board containers, corrugated pallets and display solutions. The company had trailing 12-month sales through August 2021 of approximately $39 million USD.

November 1, 2021

$5,984
cash paid for 100% asset purchase and estimated contingent consideration

5,681

303

Other

Boxpack Packaging (Boxpack)

Based near Melbourne, Australia, Boxpack specializes in flexographic and lithographic cardboard packaging, using the latest CAD design and finishing techniques. Boxpack serves multiple industries, including food and beverage, confectionary, pharmaceutical, industrial and agricultural. The company had trailing 12-month sales through June 30, 2021, of $6.2 million USD ($8.2 million AUD).

Dempsey Wood Products, Inc. (Dempsey)

Located in Orangeburg, South Carolina and founded in 1988, Dempsey is a sawmill which produces products such as kiln dried finished lumber, industrial lumber, green cut stock lumber, pine chips and shavings, landscaping mulch, and sawdust. The Company had sales of approximately $69 million in 2021.

The intangible assets for the above investments have not been finalized and allocated to their respective identifiable asset and goodwill accounts. In aggregate, investments completed since the end of the second quarter of 2022 and not consolidated with other operations contributed approximately $23.8 million in net sales and $1.0 million in operating profits during the first six months of 2023.

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UFP INDUSTRIES, INC.

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.

As a result of the investment in Dempsey on June 27, 2022, we own 50% of the issued equity of that entity, and the remaining 50% of the issued equity is owned by the previous owners (“Sellers”). The investment in Dempsey is an unconsolidated variable interest entity and we have accounted for it using the equity method of accounting because we do not have a controlling financial interest in the entity. Per the contracts, the Sellers have a put right to sell their equity interest to us for $50 million and we have a call right to purchase the Seller’s equity interest for $70 million, which are both first exercisable in June 2025 and expire in June 2030. As of July 1, 2023, the carrying value of our investment in Dempsey is $64.3 million and is recorded in Other Assets. Our maximum exposure to loss consists of our investment amount and any contingent loss that may occur in the future as a result of a change in the fair value of Dempsey relative to the strike price of the put option.

The ~~intangible assets~~business combinations mentioned above were not significant to our operating results individually or in aggregate, and thus pro forma results for ~~the above acquisitions have~~2023 and 2022 are not been finalized and allocated to their respective identifiable asset and goodwill accounts. In aggregate, acquisitions completed since the end of June 2021 and not consolidated with other operations contributed approximately $53.7 million in net sales and $3.2 million in operating profits during the first six months of 2022.presented.

G. SEGMENT REPORTING

We operate manufacturing, treating and distribution facilities internationally, but primarily in the United States. Our business segments consist of UFP Retail Solutions, UFP ~~Industrial~~Packaging (formerly known as UFP Industrial) and UFP Construction and align with the end markets we serve. This segment structure allows for a specialized and consistent sales approach among Company operations, efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit and business units are included in our Retail, ~~Industrial,~~Packaging, and Construction segments. In the case of locations ~~which~~that serve multiple segments, results are allocated and accounted for by segment.

The exception to this market-centered reporting and management structure is our International segment, which comprises our Mexico, Canada, Europe, India, and Australia operations and sales and buying offices in other parts of the world and our Ardellis segment, which represents our wholly owned fully licensed captive insurance company based in Bermuda. Our International and Ardellis segments do not meet the quantitative thresholds in order to be separately reported and accordingly, the International and Ardellis segments have been aggregated in the “All Other” segment for reporting purposes.

“Corporate” includes purchasing, transportation and administrative functions that serve our operating segments. Operating results of Corporate primarily consist of net sales to external customers initiated by UFP Purchasing and UFP Transportation and 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 service charges are assessed to our operating segments for the use of these assets and services at fair market value rates. Total assets in the Corporate column include unallocated cash and cash equivalents, certain prepaid assets, certain property, equipment and other assets pertaining to the centralized activities of Corporate, UFP Real Estate, Inc., UFP Transportation, Inc., UFP Purchasing, Inc., and UFP RMS, LLC. The tables below are presented in thousands:


	Three Months Ended June 25, 2022												Three Months Ended July 1, 2023
	Retail		Industrial		Construction		All Other		Corporate		Total		Retail		Packaging		Construction		All Other		Corporate		Total
Net sales to outside customers	$	1,121,440	$	676,333	$	975,376	$	124,416	$	3,309	$	2,900,874	$	919,998	$	488,100	$	550,464	$	86,224	$	(868)	$	2,043,918
Intersegment net sales		67,612		21,487		31,866		125,893		(246,858)		—		198,518		20,976		23,554		75,480		(318,528)		—
Earnings from operations		24,527		94,210		132,832		22,748		11,249		285,566		60,180		56,864		61,959		6,817		7,677		193,497

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UFP INDUSTRIES, INC.


	Three Months Ended June 26, 2021												Three Months Ended June 25, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total		Retail		Packaging		Construction		All Other		Corporate		Total
Net sales to outside customers	$	1,259,218	$	611,181	$	738,704	$	89,470	$	1,968	$	2,700,541	$	1,121,440	$	676,333	$	975,376	$	124,416	$	3,309	$	2,900,874
Intersegment net sales		65,147		24,985		20,034		126,054		(236,220)		—		67,612		21,487		31,866		125,893		(246,858)		—
Earnings from operations		62,051		79,526		67,107		16,304		11,947		236,935		24,527		94,210		132,832		22,748		11,249		285,566


	Six Months Ended June 25, 2022												Six Months Ended July 1, 2023
	Retail		Industrial		Construction		All Other		Corporate		Total		Retail		Packaging		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	$	1,669,575	$	974,661	$	1,066,057	$	153,736	$	2,365	$	3,866,394
Intersegment net sales		133,560		43,660		57,218		235,665		(470,103)		—		421,843		41,026		49,390		152,967		(665,226)		—
Earnings from operations		95,924		176,601		211,650		37,563		22,853		544,591		101,236		111,596		116,207		10,851		15,315		355,205


	Six Months Ended June 26, 2021												Six Months Ended June 25, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total		Retail		Packaging		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	$	2,114,672	$	1,287,702	$	1,761,847	$	219,983	$	5,983	$	5,390,187
Intersegment net sales		112,733		42,891		34,495		223,450		(413,569)		—		133,560		43,660		57,218		235,665		(470,103)		—
Earnings from operations		115,596		119,936		100,125		24,282		14,483		374,422		95,924		176,601		211,650		37,563		22,853		544,591

The following table presents goodwill by segment as of ~~June 25, 2022,~~July 1, 2023, and December ~~25, 2021~~31, 2022 (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


	Retail		Packaging		Construction		All Other		Corporate		Total
Balance as of December 31, 2022	$	84,640	$	148,909	$	87,670	$	16,101	$	—	$	337,320
2023 Purchase Accounting Adjustments		(979)		(67)		—		—		—		(1,046)
Foreign Exchange, Net		—		—		126		95		—		221
Balance as of July 1, 2023	$	83,661	$	148,842	$	87,796	$	16,196	$	—	$	336,495

The following table presents total assets by segment as of ~~June 25, 2022,~~July 1, 2023, and December ~~25, 2021~~31, 2022 (in thousands).


	Total Assets by Segment						Total Assets by Segment
	June 25,		December 25,				July 1,		December 31,
Segment Classification	2022		2021		% Change		2023		2022		% Change
Retail	$	1,075,310	$	844,189	27.4	%	$	992,463	$	889,417	11.6	%
Industrial		835,735		741,672	12.7
Packaging								838,495		885,878	(5.3)
Construction		912,507		736,157	24.0			698,632		712,837	(2.0)
All Other		341,877		343,363	(0.4)			295,865		308,688	(4.2)
Corporate		445,394		579,890	(23.2)			1,018,488		875,253	16.4
Total Assets	$	3,610,823	$	3,245,271	11.3	%	$	3,843,943	$	3,672,073	4.7	%

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 ~~25.0%~~23.7% in the second quarter of 2023 compared to 25.0% in the same period of 2022 and ~~2021 and~~ was ~~24.5%~~23.7% in the first six months of ~~2022~~2023 compared to ~~24.4%~~24.5% for the same period in ~~2021.~~2022. ~~Permanent~~The decrease in our overall effective tax ~~differences and credits have remained relatively consistent~~rate was primarily due to an increase in our tax deduction from ~~2021 to 2022, which is the primary reason the rate increased only slightly.~~stock based compensation accounted for as a permanent difference.

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UFP INDUSTRIES, INC.

I. COMMON STOCK

Below is a summary of common stock issuances for the first six months of ~~2022~~2023 and ~~2021~~2022 (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


	July 1, 2023
Share Issuance Activity	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	19	$	87.86

Shares issued under the employee stock gift program	1		86.88
Shares issued under the director retainer stock program	2		87.02
Shares issued under the bonus plan	756		86.14
Shares issued under the executive stock match plan	75		85.89
Forfeitures	(10)
Total shares issued under stock grant programs	824	$	86.12

Shares issued under the deferred compensation plans	105	$	85.16

During the first six months of 2023, we repurchased 700,597 shares of our common stock at an average share price of $79.20.


	June 26, 2021			June 25, 2022
Share Issuance Activity	Common Stock		Average Share Price	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	15	$	72.94	24	$	72.58

Shares issued under the employee stock gift program	1		79.64	2		78.57
Shares issued under the director retainer stock program	3		67.77	2		79.46
Shares issued under the bonus plan	468		53.68	755		82.73
Shares issued under the executive stock grants plan	77		60.24	62		82.87
Forfeitures	(18)			(6)
Total shares issued under stock grant programs	531	$	54.71	815	$	82.72

Shares issued under the deferred compensation plans	99	$	61.50	92	$	82.59

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~~overhead and is determined ~~on a~~using the weighted average ~~FIFO basis.~~cost method. Raw materials consist primarily of unfinished wood products and other materials expected to be manufactured or treated prior to sale, while finished goods represent various manufactured and treated wood products ready for sale.

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UFP INDUSTRIES, INC.

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 July 1, 2023 and June 25, 2022 was $0.8 million and ~~June 26, 2021 was~~ $9.3 million, ~~and $23.2 million,~~ respectively.

K. SUBSEQUENT EVENTS

On ~~June 27, 2022, we acquired 50%~~July 26, 2023, our board authorized the repurchase of ~~the equity~~up to $200 million worth of ~~Dempsey Wood Products, LLC, for $66.0 million. Based in Orangeburg, South Carolina, Dempsey Wood Products produces kiln-dried lumber, pallet lumber,~~shares of outstanding stock through July 31, 2024. This share authorization supersedes and ~~other industrial wood products.~~replaces our prior share repurchase authorizations.

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UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

UFP Industries, Inc. is a holding company with subsidiaries ~~throughout~~in North America, Europe, Asia, and Australia that design, manufacture, and supply products made from wood, wood ~~composite~~and non-wood composites, and other ~~products~~materials to three ~~markets:~~segments: retail, ~~industrial,~~packaging, and construction. Our business segments are functionally interdependent and are supported by common corporate services, such as accounting and finance, information technology, human resources, marketing, purchasing, transportation, legal and compliance, among others. We regularly invest in automation and implement best practices to improve the efficiency of our manufacturing facilities across each of the segments. The results and improvements from these investments are shared among the segments. This exchange of ideas drives faster innovation for new products, processes, and product improvements. While the majority of our facilities serve only one business segment, many of our larger facilities serve two or more segments.

We believe that our operating structure allows us to better evaluate market conditions and opportunities and more effectively allocate capital and resources to the appropriate segments and business units. Also, we believe our diversification and manner in which we operate our business provide an inherent hedge against the business cycles our end markets experience and over which we have limited control. Accordingly, we have the ability to provide more stable earnings and cash flows to our shareholders. Our diversification and operating practices also mitigate the impact that more volatile lumber market conditions have on traditional lumber companies. We are headquartered in Grand Rapids, ~~Michigan.~~Mich. For more information about UFP Industries, Inc., or ~~our~~its affiliated operations, go to 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~~We do not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in currency and inflation; fluctuations in the price of lumber; ~~adverse or unusual weather conditions;~~ adverse economic conditions in the markets we serve; concentration of sales to customers; vertical integration strategies; excess capacity or supply chain challenges; our ability to make successful business acquisitions; government regulations, particularly involving environmental and safety ~~regulations, government imposed “stay at home” orders~~regulations; adverse or unusual weather conditions; inbound and ~~directives~~outbound transportation costs; alternatives to ~~cease or curtail operations;~~replace treated wood products; Cybersecurity breaches; tariffs on import and ~~our ability to make successful business acquisitions.~~export sales; and potential pandemics. Certain of these risk factors as well as other risk factors and additional information are included in ~~the Company's~~our reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission. We are pleased to present this overview of the second quarter of ~~2022.~~2023.

OVERVIEW

Our results for the second quarter of ~~2022~~2023 include the following highlights:

●

Our net sales ~~were up 7%~~decreased 30% compared to the second quarter of ~~2021,~~2022, which was comprised of a ~~4% increase~~20% decrease in selling prices ~~a 1% increase in unit sales due to acquisitions completed since June of last year,~~ and a ~~2% increase~~10% decrease in organic unit sales. The overall ~~increase~~decrease in our selling prices is primarily due to ~~a combination~~lower lumber prices. Organic unit declines consisted of ~~an improvement~~4% in our ~~product mix of value-added products which tend to be sold on a fixed price, elevated end market demand, and~~retail segment, 9% in our ~~value-based selling initiatives. Organic unit growth of 17%~~packaging segment, 18% in our construction segment, ~~was offset by an organic unit decline of 7%~~and 22% in our ~~retail segment and 1% in our industrial~~international segment.

●

Our gross profits increased by $82.2 million, or 19.5%, compared to the same period of the prior year. Acquired operations contributed $6 million to the increase in our gross profits. Excluding the impact of acquisitions, gross profits increased by $76.2 million and we estimate that value-added products contributed $131 million to the increase, which was offset by a decrease in gross profit of $55 million due to the impact of 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 margins, and our ability to effectively include lumber and other cost increases in the selling prices of our products. In addition, our value-based selling practices have enabled us to improve our profit per unit. Acquisitions contributed approximately $2.5 million to our increase in operating profits.

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UFP INDUSTRIES, INC.

●

Our gross profits decreased by $103.4 million, or 20.5%, compared to the same period of the prior year, exceeding our 10% decline in unit sales, due to competitive price pressure and negative operating leverage on the drop in volume. The gross profit of Retail increased $48 million and was offset by declines in gross profit of $90 million in Construction, $44 million in Packaging, and $19 million in International. The overall decline in gross profits is primarily due to the decline in unit sales, unfavorable cost variances as a result of fixed manufacturing costs, and more competitive pricing in certain business units. These unfavorable factors were partially offset by more favorable lumber price trends in 2023 on products sold in our Retail segment that are based on variable selling price.

●

Our operating profits decreased $92 million, or 32.2%, compared to the second quarter of 2022. The overall decrease is a result of the decline in gross profits mentioned above offset by a $10 million decrease in selling, general, and administrative (“SG&A”) expenses. Our SG&A declined primarly due to our incentive compensation plans which are tied to profitability and return on investment. Our decremental operating margin comparing our decrease in operating profits relative to decrease in net sales was 10.7%, which was lower than the estimated range of 15% to 20% we previously disclosed.

●

Our cash flows from operations ~~for~~was $321 million in the first six months of ~~2022 increased~~2023 compared to $90 million ~~compared to $116 million of cash used in operations~~ during the first six months of ~~2021.~~2022. The ~~improved cash flows~~$231 million improvement resulted from a seasonal increase in net working capital that was $349 million lower in the first six months of 2023 than it was in 2022, offset by a $118 million decrease in 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 cash surplus at the end of June 2023 was $425 million compared to net debt (debt and cash overdraft less cash) ~~at the end~~ of ~~June 2022 was $190.7 million compared to $561.9~~$191 million at the end of June ~~2021.~~2022. 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~~$2.0 billion at the end of the second quarter of ~~2022.~~2023.

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					Random Lengths Composite
	Average $/MBF					Average $/MBF
	2022			2021		2023			2022
January	$	1,112		$	890	$	386		$	1,112
February		1,225			954		437			1,225
March		1,321			1,035		411			1,321
April		1,051			1,080		420			1,051
May		948			1,428		400			948
June		670			1,344		398			670

Second quarter average	$	890		$	1,284	$	406		$	890
Year-to-date average	$	1,055		$	1,122	$	409		$	1,055

Second quarter percentage change		(30.7)	%				(54.4)	%
Year-to-date percentage change		(6.0)	%				(61.2)	%

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UFP INDUSTRIES, INC.

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


	Southern Yellow Pine					Southern Yellow Pine
	Average $/MBF					Average $/MBF
	2022			2021		2023			2022
January	$	1,010		$	858	$	406		$	1,010
February		1,115			903		452			1,115
March		1,198			938		464			1,198
April		902			922		474			902
May		732			1,150		437			732
June		574			1,052		427			574

Second quarter average	$	736		$	1,041	$	446		$	736
Year-to-date average	$	922		$	971	$	443		$	922

Second quarter percentage change		(29.3)	%				(39.4)	%
Year-to-date percentage change		(5.0)	%				(52.0)	%

~~The decrease in~~Lower overall lumber prices ~~for the second quarter of the year was~~in 2023 compared to 2022 is primarily due to increased capacity and the supply of lumber in North America combined with an increase in imports from other countries while demand ~~in the retail and housing markets beginning to return to more normalized levels and improvements in supply chain constraints.~~for lumber has declined. A change in lumber prices impacts our profitability of products sold with fixed and variable prices, as discussed below.

IMPACT OF THE LUMBER MARKET ON OUR OPERATING RESULTS

We generally price our products to pass lumber costs through to our customers so that our profitability is based on the value-added manufacturing, distribution, engineering, and other services we provide. As a result, our dollar sales levels (and working capital requirements) are impacted by the lumber costs of our products. Lumber costs were ~~54.8%~~39.0% and ~~63.7%~~54.8% of our sales in the first six months of ~~2022~~2023 and ~~2021,~~2022, respectively. The decrease from the prior year ratio reflects the significant decrease in the Lumber Market as well as an improvement in our sales mix of value-added products ~~as well as~~and 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,~~Additionally, as explained below, ~~our products are~~product categories can be priced differently. Some of our products have fixed selling prices, while ~~the selling prices of other~~our variably priced products ~~are~~have pricing indexed to the reported Lumber Market with a fixed dollar adder to cover conversion costs and profits. Consequently, the level and trend of the Lumber Market impact our products differently.

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

●

Products with fixed selling prices. These products include value-added products, such as manufactured items, sold within all segments. Prices for these products are generally fixed at the time of the sales quotation for a specified period of time. In order to reduce any exposure to adverse trends in the price of component lumber products, we attempt to lock in costs with our suppliers or purchase necessary inventory for these sales commitments. The time period limitation eventually allows us to periodically re-price our products for changes in lumber costs from our suppliers. ~~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 profit. These products primarily include treated lumber, panel goods, other commodity-type items, and trusses sold to the manufactured housing industry. For these products, we estimate ~~the~~ customers’ needs and we carry ~~anticipated~~appropriate levels of inventory. Because lumber costs are incurred in advance of final sale prices, subsequent increases or decreases in the market price of lumber impact our gross margins. ~~We believe our sales~~Sales of these products are ~~at their~~ highest ~~relative level~~ in ~~our~~the second quarter, primarily due to seasonal demand for pressure-treated lumber sold in our retail segment.

For each of the product pricing categories above, our margins are exposed to changes in the trend of lumber prices. As a result of the balance in our net sales to each of our end markets we believe our gross profits are more stable than those of our competitors who are less diversified.

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

●

Products with significant inventory levels with low turnover rates, whose selling prices are indexed to the Lumber Market. In other words, the longer the period of time these products remain in inventory, the greater the exposure to changes in the price of lumber. This ~~would include~~includes treated lumber, which comprised approximately ~~16%~~21% of our total ~~annual~~net sales in ~~2021.~~the first six months of 2023. This exposure is less significant with remanufactured lumber, panel goods, other commodity-type items, and trusses sold to the manufactured housing market due to the higher rate of inventory turnover. We attempt to mitigate the risk associated with treated lumber through managed inventory ~~consignment~~ programs with our vendors. ~~Our new Sunbelt and Spartanburg Forest Products plants began participating in these consignment programs in 2022, and we~~We estimate that ~~24.2%~~19% of ~~their inventory was consigned with vendors.~~our total purchases for the first six months of 2023 were transacted under these programs. (Please refer to the “Risk Factors” section of our annual report on form 10-K, filed with the United States Securities and Exchange Commission.)

●

Products with fixed selling prices sold under long-term supply arrangements, particularly those involving multi-family construction projects. We attempt to mitigate this risk through our purchasing practices and longer vendor commitments.

In addition to the impact of ~~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
Lumber cost	$	300		$	400
Conversion cost		50			50
= Product cost		350			450
Adder		50			50
= Sell price	$	400		$	500
Gross margin		12.5	%		10.0	%

As is apparent from the preceding example, the level of lumber prices does not impact our overall profits but does impact our margins. Gross margins and operating margins are negatively impacted during periods of high lumber prices; conversely, we experience margin improvement when lumber prices are relatively low.

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~~UFP INDUSTRIES, INC.~~

BUSINESS COMBINATIONS

We completed ~~two~~no business ~~acquisition~~acquisitions during the first six months of fiscal ~~2022 and nine during all of~~2023. We completed four in fiscal ~~2021.~~2022. The annual historical sales attributable to acquisitions completed ~~in the first six months of fiscal 2022 is approximately $62 million, while acquisitions completed~~ during the last six months of ~~2021 have annual sales of~~2022 was approximately ~~$76~~$116 million. These business combinations were not significant to our quarterly results individually or in aggregate and thus pro forma results for ~~2022~~2023 and ~~2021~~2022 are not presented.

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

RESULTS OF OPERATIONS

The following table presents, for the periods indicated, the components of our Unaudited Condensed Consolidated Statements of Earnings as a percentage of net sales.


	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 25,		June 26,		June 25,		June 26,		July 1,		June 25,		July 1,		June 25,
	2022		2021		2022		2021		2023		2022		2023		2022
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	82.6		84.4		81.8		84.4		80.4		82.6		80.4		81.8
Gross profit	17.4		15.6		18.2		15.6		19.6		17.4		19.6		18.2
Selling, general, and administrative expenses	7.4		6.8		8.1		7.4		10.0		7.4		10.3		8.1
Other (gains) losses, net	0.1		—		—		—
Other losses (gains), net									0.1		0.1		0.1		—
Earnings from operations	9.8		8.8		10.1		8.3		9.5		9.8		9.2		10.1
Other expense, net	0.3		0.1		0.3		0.1
Other (income) expense, net									(0.2)		0.3		(0.2)		0.3
Earnings before income taxes	9.5		8.7		9.9		8.2		9.7		9.5		9.4		9.9
Income taxes	2.4		2.2		2.4		2.0		2.3		2.4		2.2		2.4
Net earnings	7.2		6.5		7.4		6.2		7.4		7.2		7.1		7.4
Less net earnings attributable to noncontrolling interest	(0.2)		(0.1)		(0.2)		(0.1)		—		(0.2)		—		(0.2)
Net earnings attributable to controlling interest	7.0	%	6.4	%	7.3	%	6.1	%	7.4	%	7.0	%	7.2	%	7.3	%

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

As a result of the impact of the level of lumber prices on the percentages displayed in the table above (see Impact of the Lumber Market on Our Operating Results), we believe it is useful to compare our change in units sold with our change in gross profits, selling, general, and administrative expenses, and operating profits as presented in the following table. 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.~~


	Percentage Change
	Three Months Ended				Six Months Ended
	July 1,		June 25,		July 1,		June 25,
	2023		2022		2023		2022
Units sold	(8.0)	%	3.0	%	(9.0)	%	6.0	%
Gross profit	(20.5)		19.5		(22.8)		38.7
Selling, general, and administrative expenses	(4.6)		16.3		(8.1)		29.9
Earnings from operations	(32.2)		20.5		(34.8)		45.4

The following table presents, for the periods indicated, our selling, general, and administrative ~~expenses~~ (SG&A) costs 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				Three Months Ended				Six Months Ended
		June 25,		June 26,		June 25,		June 26,		July 1,		June 25,		July 1,		June 25,
		2022		2021		2022		2021		2023		2022		2023		2022
Gross profit	$	503,452	$	421,294	$	981,815	$	707,848	$	400,067	$	503,452	$	758,396	$	981,815
Selling, general, and administrative expenses	$	214,538	$	184,539	$	434,688	$	334,637	$	204,703	$	214,538	$	399,386	$	434,688
SG&A as percentage of gross profit		42.6%		43.8%		44.3%		47.3%		51.2%		42.6%		52.7%		44.3%

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UFP INDUSTRIES, INC.

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 (“Retail”), UFP ~~Industrial~~Packaging (“Packaging” and formerly known as UFP Industrial) and UFP Construction (“Construction”), and align with the end markets we serve. Among other ~~things,~~advantages, 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~~unit. Business units are ~~included in~~allocated among our Retail, ~~Industrial,~~Packaging, 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												Three Months Ended July 1, 2023

	Retail		Industrial		Construction		All Other		Corporate		Total		Retail		Packaging		Construction		All Other		Corporate		Total
Net sales	$	1,121,440		676,333	$	975,376	$	124,416	$	3,309	$	2,900,874	$	919,998	$	488,100	$	550,464	$	86,224	$	(868)	$	2,043,918
Cost of goods sold		1,048,260		514,216		748,060		83,336		3,549		2,397,421		799,017		369,865		413,260	��	64,128		(2,419)		1,643,851
Gross profit		73,180		162,117		227,316		41,080		(240)		503,453		120,981		118,235		137,204		22,096		1,551		400,067
Selling, general, administrative expenses		48,387		67,235		94,638		16,356		(12,078)		214,538		60,855		61,377		74,083		13,943		(5,555)		204,703
Other		266		672		(154)		1,976		589		3,349		(54)		(6)		1,162		1,336		(571)		1,867
Earnings from operations	$	24,527	$	94,210	$	132,832	$	22,748	$	11,249	$	285,566	$	60,180	$	56,864	$	61,959	$	6,817	$	7,677	$	193,497


	Three Months Ended June 25, 2022

	Retail		Packaging		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												Six Months Ended July 1, 2023

	Retail		Industrial		Construction		All Other		Corporate		Total		Retail		Packaging		Construction		All Other		Corporate		Total
Net sales	$	2,114,672	$	1,287,702	$	1,761,847	$	219,983	$	5,983	$	5,390,187	$	1,669,575	$	974,661	$	1,066,057	$	153,736	$	2,365	$	3,866,394
Cost of goods sold		1,907,155		976,031		1,373,119		147,360		4,707		4,408,372		1,454,156		735,528		807,194		112,004		(884)		3,107,998
Gross profit		207,517		311,671		388,728		72,623		1,276		981,815		215,419		239,133		258,863		41,732		3,249		758,396
Selling, general, administrative expenses		111,055		134,466		176,975		32,981		(20,789)		434,688		114,210		127,629		141,421		27,465		(11,339)		399,386
Foreign currency exchange loss														(27)		(92)		1,235		3,416		(727)		3,805
Other		538		604		103		2,079		(788)		2,536												—
Earnings from operations	$	95,924	$	176,601	$	211,650	$	37,563	$	22,853	$	544,591	$	101,236	$	111,596	$	116,207	$	10,851	$	15,315	$	355,205

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.~~


	Six Months Ended June 25, 2022

	Retail		Packaging		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

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											Three Months Ended July 1, 2023

	Retail		Industrial		Construction		All Other		Corporate	Total		Retail		Packaging		Construction		All Other		Corporate	Total
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	N/A	100.0	%	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		86.8		75.8		75.1		74.4		—	80.4
Gross profit	6.5		24.0		23.3		33.0		—	17.4		13.2		24.2		24.9		25.6		—	19.6
Selling, general, administrative expenses	4.3		9.9		9.7		13.1		—	7.4		6.6		12.6		13.5		16.2		—	10.0
Other	—		—		—		1.6		—	—		—		—		—		1.5		—	0.1
Earnings from operations	2.2	%	13.9	%	13.6	%	18.3	%	—	9.8	%	6.5	%	11.7	%	11.3	%	7.9	%	—	9.5	%

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
%

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UFP INDUSTRIES, INC.


	Three Months Ended June 25, 2022

	Retail		Packaging		Construction		All Other		Corporate	Total
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	N/A	100.0	%
Cost of goods sold	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.

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
%


	Six Months Ended July 1, 2023

	Retail		Packaging		Construction		All Other		Corporate	Total
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	N/A	100.0	%
Cost of goods sold	87.1		75.5		75.7		72.9		—	80.4
Gross profit	12.9		24.5		24.3		27.1		—	19.6
Selling, general, administrative expenses	6.8		13.1		13.3		17.9		—	10.3
Other	—		—		—		2.2		—	0.1
Earnings from operations	6.1	%	11.4	%	10.9	%	7.1	%	—	9.2	%

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
%


	Six Months Ended June 25, 2022

	Retail		Packaging		Construction		All Other		Corporate	Total
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	N/A	100.0	%
Cost of goods sold	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.

Table of Contents

UFP INDUSTRIES, INC.

NET SALES

We design, manufacture and market wood and wood-alternative products, primarily used to enhance outdoor living ~~environments,~~environments; for national home centers and other ~~retailers,~~retailers; for engineered wood components, structural lumber, and other products for ~~the manufactured housing industry, engineered wood components for~~factory-built and site-built residential and commercial ~~construction,~~construction; for customized interior fixtures used in a variety of retail stores, commercial, and other ~~structures,~~structures; and ~~specialty~~structural wood packaging, components and packing materials for various industries. Our strategic long-term sales objectives include:

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


	% Change										% Change
	in Sales		in Selling Prices		in Units		Acquisition Unit Change		Organic Unit 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	%
Second quarter 2023 versus Second quarter 2022											(29.5)	%	(21.5)	%	(8.0)	%	—	%	(8.0)	%
Year-to-date 2023 versus Year-to-date 2022											(28.3)	%	(19.3)	%	(9.0)	%	—	%	(9.0)	%

●

Diversifying our end market sales mix by increasing sales of 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.

●	Expanding geographically in our core businesses, domestically and in our core packaging business internationally.

●

Increasing our sales of ~~"value-added"~~“value-added” products and enhancing our product offering with new or improved products. Value-added products generally consist of fencing, decking, lattice, and other specialty products sold toin the ~~retail market,~~Retail segment; structural ~~wood~~and protective packaging and machine-built pallets sold in the Packaging segment; engineered wood components, customized interior fixtures, manufactured and assembled concrete forms sold in the Construction segment; and ~~"wood alternative"~~“wood alternative” products. Engineered wood components include roof trusses, wall panels, and floor systems. Wood alternative products consist of products manufactured with wood and non-wood composites, ~~metal,~~metals and ~~plastics.~~plastics sold in each of our segments. Although we consider the treatment of dimensional lumber and panels with certain chemical preservatives a value-added process, treated lumber is not presently included in the value-added sales totals. Remanufactured lumber and panels that are components of finished goods are also generally categorized as “commodity-based” products.

The following table presents, for the periods indicated, our percentage of value-added and commodity-based sales to total sales by our segments:


	Three Months Ended June 25, 2022				Three Months Ended June 26, 2021				Three Months Ended July 1, 2023				Three Months Ended June 25, 2022
	Value-Added		Commodity-Based		Value-Added		Commodity-Based		Value-Added		Commodity-Based		Value-Added		Commodity-Based
Retail	45.3	%	54.7	%	39.7	%	60.3	%	51.4	%	48.6	%	45.3	%	54.7	%
Industrial	70.5	%	29.5	%	63.8	%	36.2	%
Packaging									77.6	%	22.4	%	70.5	%	29.5	%
Construction	74.7	%	25.3	%	67.9	%	32.1	%	83.8	%	16.2	%	74.7	%	25.3	%
All Other and Corporate	75.5	%	24.5	%	73.4	%	26.6	%
All Other									81.3	%	18.7	%	75.4	%	24.6	%
Corporate									100.0	%	—	%	76.0	%	24.0	%
Total Sales	62.2	%	37.8	%	53.8	%	46.2	%	67.4	%	32.6	%	62.2	%	37.8	%

Table of Contents

UFP INDUSTRIES, INC.

	Six Months Ended June 25, 2022				Six Months Ended June 26, 2021					Six Months Ended July 1, 2023				Six Months Ended June 25, 2022
	Value-Added		Commodity-Based		Value-Added		Commodity-Based			Value-Added		Commodity-Based		Value-Added		Commodity-Based
Retail	43.2	%	56.8	%	41.5	%	58.5	%		50.8	%	49.2	%	43.2	%	56.8	%
Industrial	69.2	%	30.8	%	65.1	%	34.9	%
Packaging										77.3	%	22.7	%	69.2	%	30.8	%
Construction	73.7	%	26.3	%	68.3	%	31.7	%		83.5	%	16.5	%	73.7	%	26.3	%
All Other and Corporate	73.9	%	26.1	%	72.7	%	27.3	%
All Other										79.6	%	20.4	%	73.9	%	26.1	%
Corporate										24.5	%	75.5	%	74.7	%	25.3	%
Total Sales	60.5	%	39.5	%	55.5	%	44.5	%		67.5	%	32.5	%	60.5	%	39.5	%

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.
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.									Note: Certain prior year product reclassifications and the change in designation of certain products as “value-added” resulted in a change in prior year’s sales.

Our overall unit sales of value-added products ~~increased~~decreased approximately 6%11% in the second quarter ~~of 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~~2023 compared to ~~the same period last year, comprised of a 3% contribution from acquisitions and 3% organic growth.~~2022. Our ~~organic~~overall unit sales of commodity-based products decreased approximately ~~1% quarter-over-quarter~~10% in the second quarter and ~~our overall unit sales of commodity-based products increased~~ approximately 5%7% in the first six months of ~~2022~~2023 compared to the same period last ~~year, comprised of a 4% contribution from acquisitions and 1% organic growth.~~year.

●

Developing new products. We define new products as those that will generate sales of at least $1 million per year within 4 years of launch and are still growing and gaining market ~~penetration.~~penetration and meet our internal definition of value-added products. New product sales in the second quarter and first six months of ~~2022 increased 37%.~~2023 decreased 9% and 8%, respectively, due to a decline in lumber prices which were passed to customers in our selling prices. Approximately ~~$211~~$9.6 million of new product sales for the first six months of ~~2021,~~2022, while still sold, were sunset in ~~2022~~2023 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~~$795 million in ~~2022.~~2023.

~~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 2021, due to a 5% decrease in selling prices, a 2% decrease due to the transfer of 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 UFP Edge, and we believe investments we’ve made to expand capacity in our Deckorators and UFP Edge business units will add planned sales of nearly $100 million to the Retail segment for all of 2022. Finally, sales to big box customers were down 10%, while sales to independent retailers decreased 15%.

Table of Contents

UFP INDUSTRIES, INC.

The table below presents new product sales in thousands:


	New Product Sales by Segment
	Three Months Ended
	July 1,		% of Segment		June 25,		% of Segment			% Change
	2023		Net Sales		2022		Net Sales			in Sales
Retail	$	84,515	9.2	%		89,349		8.0	%		(5.4)	%
Packaging		72,844	14.9	%		71,414		10.6	%		2.0	%
Construction		26,698	4.9	%		40,777		4.2	%		(34.5)	%
All Other and Corporate		169	0.2	%		625		0.5	%		(73.0)	%
Total New Product Sales		184,226	9.0	%		202,165		7.0	%		(8.9)	%

Note: Certain prior year product reclassifications and the change in designation of certain products as "new" resulted in a change in prior year's sales.

	New Product Sales by Segment
	Six Months Ended
	July 1,		% of Segment		June 25,		% of Segment			% Change
	2023		Net Sales		2022		Net Sales			in Sales
Retail	$	152,699	9.1	%		167,997		7.9	%		(9.1)	%
Packaging		144,789	14.9	%		137,989		10.7	%		4.9	%
Construction		54,626	5.1	%		77,274		4.4	%		(29.3)	%
All Other and Corporate		603	0.4	%		1,392		0.6	%		(56.7)	%
Total New Product Sales		352,717	9.1	%		384,652		7.1	%		(8.3)	%

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 2023 decreased by 18% compared to the same period of 2022 due to a decline in selling prices. Our selling prices of variable-priced products declined due to lower lumber prices. The selling prices of these products are indexed to the lumber market at the time they are shipped. Additionally, our unit sales to big box customers, which we believe are more closely correlated with repair and remodel activity, increased approximately 5%, while unit sales to independent retailers, which we believe are more closely correlated to new housing starts, decreased approximately 20%.

Gross profits ~~decreased~~increased by ~~$49.2~~$47.8 million, or ~~40.2%~~65.3% to ~~$73.2~~$121.0 million for the second quarter of ~~2022~~2023 compared to the same period last year. The ~~decrease~~increase in gross profit was attributable to the following:

●

The gross profits of our Sunbelt and ProWood business units ~~decreased~~increased by a total of ~~$29.9 million,~~$41.7 million. The products sold by these units consist primarily of pressure treated lumber sold at a variable price indexed to the lumber market at the time they are shipped. The improvement in profitability is primarily due to an increase in unit sales, Sunbelt’s greater utilization of our managed inventory programs, and the unfavorable impact ~~that~~ declining lumber prices had on ~~pressure treated products sold at a variable price. A decrease in unit sales also contributed to~~our pricing and profitability throughout the ~~reduction in gross profit.~~second quarter of 2022.

●

~~Our UFP Edge and Retail Building Products~~The gross profit of our Deckorators business ~~units contributed $21.1~~unit increased by $6.8 million ~~to the decrease in gross profits~~ due to ~~the impact that declining lumber prices had on~~an increase in unit sales, an increase in new products, ~~sold at a variable price in these business units.~~

●

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

SG&A ~~decreased~~increased by approximately ~~$12.0~~$12.5 million, or ~~19.9%~~25.8%, in the second quarter of ~~2022~~2023 compared to the same period of ~~2021. SG&A of recently acquired businesses added roughly $1.5 million to overall SG&A.~~2022. Accrued bonus expense, which varies with ~~our~~the overall profitability of the segment and return on investment, ~~decreased~~increased approximately ~~$17.2~~$11.7 million from the second quarter of ~~2021~~2022 and totaled approximately ~~$3.8~~$15.5 million for the quarter. ~~Bonus expense was also impacted by the plan modification disclosed above. The decrease was~~Advertising expenses increased $1.7 million and were partially offset by ~~increases~~a decrease in ~~advertising of $1.3 million,~~ bad debt ~~expenses~~expense of ~~$1.1 million, travel related expenses~~$1.2 million.

Table of ~~$0.8 million, and salaries and wages of $0.6 million.~~Contents

UFP INDUSTRIES, INC.

Earnings from operations for the Retail reportable segment ~~decreased~~increased in the second quarter of ~~2022~~2023 compared to ~~2021~~2022 by ~~$37.5~~$35.7 million, or ~~60.5%~~145.4%, as a result of the factors mentioned above.

Net sales in the first six months of ~~2022 increased~~2023 decreased by 5%21% compared to the same period of ~~2021,~~2022, due to a ~~4% increase~~20% decrease in selling prices and ~~acquisition~~a 1% organic unit ~~growth~~decline. Our selling prices of ~~6%, offset by a 2% decrease~~variable-priced products declined due to ~~the transfer~~lower lumber prices. The selling prices of ~~certain sales~~these products are indexed to the ~~Construction segment, and an organic~~lumber market at the time they are shipped. Additionally, 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 approximately 5%, while unit sales to independent retailers ~~increased 3%~~decreased approximately 19%.

Gross profits ~~decreased~~increased by ~~$15.3~~$7.9 million, or ~~6.9%~~3.8% to ~~$207.5~~$215.4 million for the first six months of ~~2022~~2023 compared to the same period last year. Our ~~decrease~~increase 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~~increased $5.6 million, primarily due to ~~the impact that declining~~less volatile lumber prices ~~had on~~during the first six months of 2023 compared to severe volatility in the same period of 2022. The products sold by these units consist primarily of pressure treated ~~products that are~~lumber sold at a variable ~~price.~~price indexed to the lumber market at the time they are shipped.

●

~~Our Retail Building Products~~The gross profit of our UFP Edge business unit ~~contributed $13.3~~decreased by $7.0 million ~~to the decrease in gross profits~~ due to ~~the impact that declining lumber prices had on products sold at a variable price.~~decreases in unit sales.

●

~~Acquired operations contributed $14.3~~The gross profit of our Deckorators business unit increased by $9.3 million ~~which partially offset the decrease~~due to an increase in ~~gross profits.~~unit sales.

SG&A increased by approximately ~~$3.6~~$3.2 million, or ~~3.3%~~2.8%, in the first six months of ~~2022~~2023 compared to the same period of ~~2021. SG&A of recently acquired businesses added $4.1 million to overall SG&A.~~2022. Accrued bonus expense, which varies with ~~our~~the overall profitability of the segment and return on investment, ~~decreased approximtely $10.4~~increased approximately $2.5 million and totaled approximately ~~$24.5~~$26.9 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 increases~~2023. Increases in salaries and wages of ~~$2.7~~$1.5 million and advertising ~~of $1.8 million, travel-related~~ expenses of ~~$1.4~~$2.2 million were offset by decreases in sales incentive compensation of $2.7 million and bad debt expenses of ~~$0.9~~$1.4 million.

Earnings from operations for the Retail reportable segment ~~decreased~~increased in the first six months of ~~2022~~2023 compared to ~~2021~~2022 by ~~$19.7~~$5.3 million, or ~~17.0%~~5.5%, as a result of the factors mentioned above.

~~Table of Contents~~

~~UFP INDUSTRIES, INC.~~

~~Industrial~~Packaging Segment

Net sales in the second quarter of ~~2022 increased 11%~~2023 decreased 28% compared to the same period of ~~2021,~~2022, due to ~~an 11% increase~~a 21% decrease in selling prices and a 9% decrease in organic unit sales, offset by acquisition unit growth of ~~1%,~~2%. The decrease in unit sales is primarily due to a decline in demand of existing customer accounts, which was partially 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~~market share gains associated with ~~$17 million in~~new product sales ~~to new customers, $24 million of sales~~and shipping to new locations of existing ~~customers,~~accounts. The decline in prices is due to competitive price pressure and ~~$26 million of new product sales. These gains were offset by the loss of unit sales on less profitable accounts.~~lower lumber costs passed to customers.

Gross profits ~~increased~~decreased by ~~$27.7~~$43.9 million, or ~~20.6%~~27.1%, for the second quarter of ~~2022~~2023 compared to the same period last year. ~~Acquisitions contributed $1.4 million to the increase~~The decrease in gross ~~profit. The remaining increase~~profits is primarily due to competitive price pressure due to lower demand as well as lower unit sales and unfavorable cost variances as 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~~fixed manufacturing costs. Acquisitions 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$3.0 million to gross ~~profits this year ($1.4 million from acquisitions).~~profit.

SG&A ~~increased~~decreased by approximately ~~$12.3~~$5.9 million, or ~~22.5%~~8.7%, in the second quarter of ~~2022~~2023 compared to the same period of ~~2021.~~2022. Accrued bonus expense, which varies with the overall profitability of the segment and return on investment, decreased approximately $3.6 million relative to the second quarter of 2022, and totaled $16.1 million for the quarter. Additionally, sales incentive compensation and bad debt expense decreased by $1.1 million and $6.7 million, respectively, from the prior year. These decreases were offset by increases in salaries and wages of $3.4 million and travel related expenses of $1.1 million. Acquired operations since the second quarter of ~~2021~~2022 contributed approximately ~~$1.0~~$2.4 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 $19.7 million for the quarter. Bonus expense was impacted by the plan modification disclosed above. The remaining increase was primarily due to 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 wages of $0.4 million, and travel related expenses of $0.4 million.

~~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 sales in the first six months of 2022 increased 21% compared to the same period of 2021, due to a 23% increase in 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.

Table of Contents

UFP INDUSTRIES, INC.

Earnings from operations for the ~~Industrial~~Packaging reportable segment ~~increased~~decreased in the ~~first six months~~second quarter of ~~2022~~2023 compared to ~~2021~~2022 by ~~$56.7~~$37.3 million, or ~~47.2%~~39.6%, due to the factors discussed above.

Net sales in the first six months of 2023 decreased 24% compared to the same period of 2022, due to a 19% decrease in selling prices and a 7% decrease in organic unit sales, partially offset by acquisition unit growth of 2%. The decrease in unit sales is primarily due to a decline in demand of existing customer accounts, which was partially offset by market share gains associated with new product sales and shipping to new locations of existing accounts. The decline in prices is due to competitive price pressure and lower lumber costs passed to customers.

Gross profits decreased by $72.5 million, or 23.3%, for the first six months of 2023 compared to the same period last year. The decrease in gross profits is primarily due to competitive price pressure due to lower demand as well as lower unit sales and unfavorable cost variances as a result of fixed manufacturing costs. Acquisitions contributed $5.4 million to gross profit.

SG&A decreased by approximately $6.8 million, or 5.1%, in the first six months of 2023 compared to the same period of 2022. Accrued bonus expense, which varies with the overall profitability of the segment and return on investment, decreased approximately $11.5 million, and totaled $31.9 million for the six months of 2023. Additionally, our bad debt expense decreased by $7.7 million and sales incentive compensation decreased by $3.7 million. These decreases were partially offset by increases in salaries and wages of $5.9 million, travel related expenses of $2.0 million, and several small increases in several different accounts. Finally, acquired operations since the first six months of 2022 contributed approximately $4.0 million to our increase in costs.

Earnings from operations for the Packaging reportable segment decreased in the first six months of 2023 compared to 2022 by $65.0 million, or 36.8%, due to the factors discussed above.

Construction Segment

Net sales in the second quarter of ~~2022 increased 32%~~2023 decreased 44% compared to the same period of ~~2021,~~2022, due to a ~~15% increase~~26% decrease in selling prices ~~2% due to the transfer of certain sales from the Retail segment~~ and an organic unit ~~sales growth~~decline of ~~15%~~18%. 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~~decreases of ~~63% in commercial construction, 35% in concrete forming, 16%~~20% in factory-built housing, ~~and 1%~~14% in site-built construction, and 39% in commercial 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~~ Organic unit changes in our concrete forming business unit were flat compared to the same period of ~~2021.~~2022. The ~~increase~~organic unit declines in our factory-built housing and site-built construction business units are due to the impact of higher interest rates on the demand for housing which has resulted in an 8% year over year decline in national housing starts and a 25% year over year decline in manufactured housing production in the second quarter of 2023. The organic unit decline in commercial construction is primarily due to a large customer delaying shipments until the third quarter of 2023. As of July 1, 2023 and June 25, 2022, we estimate that our backlog of orders in our site-built construction business unit were $113 million and $161 million, respectively. The decline in pricing was due to competitive price pressure and the decline in lumber prices which were passed to our customers.

Gross profits decreased by $90.1 million, or 39.6%, in the second quarter of 2023 compared to the same period of 2022. The decrease in our gross profit was comprised of the ~~following factors:~~following:

●

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 and site-built construction business units decreased by $29.6 million and $51.6 million, respectively, due to competitive price pressure as well as lower sales volumes and unfavorable cost variances due to fixed manufacturing costs.

●

The gross profit of our concrete forming business unit ~~increased $10.9~~decreased by $3.7 million ~~as a result of increased~~due to lower inventory turnover on products whose unit ~~sales and leveraging fixed costs. In addition, value-added sales in this business unit increased~~selling prices declined due 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.~~lower lumber market.

●

The gross profit of our commercial construction business unit ~~increased $7.6~~decreased $4.3 million as a result of ~~increased~~decreased 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.~~sales.

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SG&A ~~increased~~decreased by approximately ~~$27.7~~$20.6 million, or ~~41.4%~~21.7%, in the second quarter of ~~2022~~2023 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.~~2022. Accrued bonus expense, which varies with ~~our~~the overall profitability of the segment and return on investment, ~~increased~~decreased approximately ~~$11.0~~$11.8 million, and totaled ~~$28.7~~$16.9 million for the quarter. ~~Bonus expense was also impacted by previously discussed modifications in our plan.~~ The remaining ~~increase~~decrease was primarily due to ~~increases~~decreases in sales incentive compensation of ~~$8.9~~$6.9 million ~~salaries~~ and ~~wages of $1.3 million,~~ bad debt expense of ~~$1.3 million, and travel related expenses of $0.7~~$1.0 million.

Earnings from operations for the Construction reportable segment ~~increased~~decreased in the second quarter of ~~2022~~2023 compared to ~~2021~~2022 by ~~$65.7~~$70.9 million, or ~~97.9%~~53.4%, due to the factors mentioned above.

Net sales in the first six months of ~~2022 increased 36%~~2023 decreased 39% compared to the same period of ~~2021,~~2022, due to a ~~20% increase~~22% decrease in selling prices ~~3% due to the transfer of certain sales from the Retail segment,~~ and a decline in organic unit sales ~~growth~~ of ~~13%~~17%. Organic unit changes within this segment consisted of ~~increases~~decreases of ~~48%~~18% in site-built housing, 20% in factory-built housing, and 20% in commercial ~~construction, 26%~~construction. These declines were partially offset by 2% organic unit growth in concrete ~~forming, and 16%~~forming. The decline in ~~factory-built housing. The organic unit sales of our site-built business unit remained flat~~pricing was due to ~~capacity constraints.~~competitive price pressure and the decline in lumber prices which were passed to our customers.

Gross profits ~~increased~~decreased by ~~$165.8~~$129.9 million, or ~~74.3%~~33.4%, for the first six months of ~~2022~~2023 compared to the same period of ~~2021.~~2022. The ~~increase~~decrease in our gross profit was comprised of the ~~following factors:~~following:

●

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 and site-built construction business ~~unit increased $36.3~~units decreased by $58.6 million and $65.1 million, respectively, due to competitive price pressure as ~~a result of increased unit~~well as lower sales volumes and ~~leveraging~~unfavorable cost variances due to 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.manufacturing costs

●

The gross profit of our concrete forming business unit ~~increased~~decreased by ~~$10.2~~$9.1 million ~~including $6.7 million as a result of~~due to lower inventory turnover on products whose unit selling prices declined due to 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.~~lower lumber market.

SG&A ~~increased~~decreased by approximately ~~$54.5~~$35.6 million, or ~~44.5%~~20.1%, in the first six months of ~~2022~~2023 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.~~2022. Accrued bonus expense, which varies with ~~our~~the overall profitability of the segment and return on investment, ~~increased~~decreased approximately ~~$24.6~~$19.7 million, and totaled ~~$51.3~~$31.6 million for the first six months of ~~2022. Bonus expense was also impacted by previously discussed modifications in our plan.~~2023. The remaining ~~increase~~decrease was primarily due to ~~increases~~decreases in sales incentive compensation of ~~$15.5 million, salaries and wages of $3.4~~$12.8 million, bad debt expense of ~~$2.7~~$3.0 million, and ~~travel related expenses~~professional fees of ~~$1.4~~$1.8 million. These decreases were offset by small increases in several SG&A accounts.

Earnings from operations for the Construction reportable segment ~~increased~~decreased in the first six months of ~~2022~~2023 compared to ~~2021~~2022 by ~~$111.5~~$95.4 million, or ~~111.4%~~45.1%, due to the factors mentioned above.

All Other Segment

Our All Other reportable segment consists of our International and Ardellis (our insurance captive) segments that are not significant. The decline in sales and earnings from operations is primarily due to our operation in Mexico that exports moulding and millwork products to the U.S.

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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 ~~25.0%~~23.7% in the second quarter of ~~2022~~2023 compared to 25.0% ~~for~~in the same period ~~in 2021~~of 2022 and was ~~24.5%~~23.7% in the first six months of ~~2022~~2023 compared to ~~24.4%~~24.5% for the same period in ~~2021. Permanent~~2022. The decrease in our overall effective tax ~~differences and credits have remained relatively consistent~~rate was primarily due to an increase in our tax deduction from ~~2021 to 2022, which is the primary reason the rate increased only slightly.~~stock based compensation accounted for as a permanent difference.

OFF-BALANCE SHEET TRANSACTIONS

We have no significant off-balance sheet transactions.

LIQUIDITY AND CAPITAL RESOURCES

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


	Six Months Ended				Six Months Ended
	June 25,		June 26,		July 1,		June 25,
	2022		2021		2023		2022
Cash from (used in) operating activities	$	90,397	$	(115,733)
Cash from operating activities					$	321,064	$	90,397
Cash used in investing activities		(118,763)		(513,998)		(85,310)		(118,763)
Cash (used in) from financing activities		(125,013)		237,926
Cash used in financing activities						(97,047)		(125,013)
Effect of exchange rate changes on cash		956		112		4,579		956
Net change in all cash and cash equivalents		(152,423)		(391,693)		143,286		(152,423)
Cash, cash equivalents, and restricted cash, beginning of period		291,223		436,608		559,623		291,223
Cash, cash equivalents, and restricted cash, end of period	$	138,800	$	44,915	$	702,909	$	138,800

In general, we fund our growth 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.~~acquisition that occurred many years ago. We manage our capital structure by attempting to maintain a targeted ratio of debt to equity and debt to earnings before interest, taxes, depreciation and amortization. We believe this is one of many important factors to maintaining a strong credit profile, which in turn helps ensure timely access to capital when needed.

Seasonality has a significant impact on our working capital due to our primary selling season which occurs during the period from March to September. Consequently, our working capital increases during our first and second quarters ~~which typically results~~resulting in negative or modest cash flows from operations during those periods. Conversely, we ~~typically~~tend to experience a substantial decrease in working capital once we move beyond our peak selling season which typically results in significant cash flows from operations in our third and fourth quarters.

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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 5163 days from 4858 days during the second quarter of ~~2022~~2023 compared to the prior year period.


	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 25,		June 26,		June 25,		June 26,		July 1,		June 25,		July 1,		June 25,
	2022		2021		2022		2021		2023		2022		2023		2022
Days of sales outstanding		34		33		33		33		36		34		36		33
Days supply of inventory		35		33		38		35		38		35		38		38
Days payables outstanding		(18)		(18)		(19)		(19)
Days payables outstanding¹										(11)		(11)		(12)		(13)
Days in cash cycle		51		48		52		49		63		58		62		58

¹We’ve modified our calculation of days payables outstanding to be based on the cost of goods sold and accounts payable balances in our monthly financial statements. In prior periods, our calculation was based on invoice data. We’ve made this change to simplify the calculation and more easily integrate acquired operations into our financial metrics. The three months and six months prior year metrics have been restated for the new method which reduced days payables from a previously reported 18 days to 11 days and 19 to 13 days, respectively.

The increase in our cash cycle in the second quarter of ~~2022~~2023 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 six months of~~ 2022 ~~compared to the same period of 2021~~ was primarily due to a three day increase in our days supply of ~~inventory.~~inventory and a two day increase in our days of sales outstanding. The ~~increases~~increase in our days supply of inventory ~~are generally~~is due to carrying ~~greater amounts~~higher levels of safety stock and a drop in demand, primarily in our factory-built housing business unit. The increase in our days of sales outstanding is due to ~~supply~~receiving slightly less timely payments from our customers, primarily in our site-built construction business unit. We continue to focus on past due account balances with customers, and ~~transportation constraints.~~the percentage of our accounts receivable that are current is 94% at the end of the second quarter for both 2023 and 2022.

~~Our cash flows from operations for~~In the first six months of ~~2022 increased to $90~~2023, our cash flows from operations were $321 million ~~compared to $116~~and were comprised of net earnings of $276 million and $80 million of ~~cash used in operations during the first six months of 2021. This improvement in operational cash flows is due to net earnings and~~ non-cash expenses, ~~totaling $475 million, compared to $328 million last year,~~ offset by a ~~$385~~$35 million increase in ~~net~~ working capital since the end of ~~last year,~~December 2022. Our cash flows from operations increased by $231 million compared to ~~a $444 million increase in~~ the ~~prior year. Last~~same period of last year ~~our inventories increased more significantly from the beginning of the year until the end of June~~ primarily due to ana $349 million decrease in our seasonal investment in net working capital compared to the prior year period, offset by a decrease in our net earnings and non-cash expenses of $118 million. The seasonal increase in our net working capital was lower this year due to the drop in lumber prices ~~which remained elevated at~~and the ~~end~~softening of ~~the second quarter.~~demand.

Purchases of property, plant, and equipment ~~and acquisitions (refer to Note F for Business Combinations)~~of $85 million comprised most of our cash used in investing activities during the first six months of ~~2022 and totaled $71.7 million and $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.~~2023. Outstanding purchase commitments on existing capital projects totaled approximately ~~$80.4~~$66 million on ~~June 25, 2022.~~July 1, 2023. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, primarily in our Packaging segment and Deckorators and ProWood business units, achieve efficiencies through automation in all segments, make improvements to a number of facilities, and increase our transportation capacity (tractors, trailers) ~~in 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. ~~We currently plan to spend between $175 million to $225 million on capital projects for the year with variability due to uncertainty about supplier lead times. Notable areas~~While we maintain an active pipeline of capital spending include projects to increase the capacity and efficiency of our plants that produce our Deckorators mineral-based composite and wood-plastic composite decking and our UFP Edge siding, pattern and trim products, expand the capacity of machine-built pallet and site-built business units, and take advantage of automation opportunities.

Cash flows from financing activities consisted of 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 the program is approximately 1.4 million. Dividends paidtargets, we completed no acquisitions during the first six months of ~~2022 include first quarter dividends~~2023. Cash used for acquisitions in the same period 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,~~prior year amounted 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~~$39 million. ~~We have debt maturities of $38.7 million due~~

Cash flows used in ~~December of this year which we intend to repay through operating cash flows and available cash balances.~~financing activities consisted of:

●

Cash paid for repurchases of common stock of $55 million. We repurchased 700,597 shares of our common stock for the year at an average share price of $79.20.

●

Dividends paid during the first six months of 2023 include first quarter dividends of $16 million and second quarter dividends of $15 million ($0.25 per share).

●

Contingent consideration payments of $6 million.

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●

Distributions to noncontrolling interests were $5 million.

On ~~June 25, 2022,~~July 1, 2023, we had ~~$7.2~~$5 million outstanding on our ~~$550~~$750 million revolving credit facility, and we had approximately ~~$535.7~~$718 million in remaining availability after considering ~~$7.1~~$27 million in outstanding letters of credit. 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 ~~June 25, 2022.~~July 1, 2023.

At the end of the second quarter of ~~2022,~~2023, we have approximately ~~$1.2~~$2.0 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~~$535 million in remaining borrowing capacity.

ENVIRONMENTAL CONSIDERATIONS AND REGULATIONS

See Notes to Unaudited Consolidated Condensed Financial Statements, Note E, “Commitments, Contingencies, and Guarantees.”

CRITICAL ACCOUNTING POLICIES

In preparing our consolidated financial statements, we follow accounting principles generally accepted in the United States. These principles require us to make certain estimates and apply judgments that affect our financial position and results of operations. We continually review our accounting policies and financial information disclosures. There have been no material changes in our policies or estimates since December ~~25, 2021.~~31, 2022.

FORWARD OUTLOOK

Most recently, our long-term goals have been to:

●

Grow our annual unit sales by 5-7%. We anticipate smaller tuck in acquisitions will continue to contribute toward this goal;

●

Achieve and sustain a minimum 10% adjusted EBITDA margin by continuing to enhance our capabilities and grow our portfolio and sales of value-added products;

●

Earn an incremental return on new investment over our cost of capital;

●

Maintain a conservative capital structure.

We believe effectively executing our strategies will allow us to achieve these long-term goals in the future. However, demand in the markets we serve has contracted and overall economic conditions indicate the U.S. economy may enter a recession, which may impact our results, depending on its severity and duration. The following factors should be considered when evaluating our future results:

●

Lumber prices, which impact our cost of goods sold and selling prices, have normalized due to additional capacity added by sawmills and demand falling from peak levels due to inflation and an increase in interest rates. We anticipate lumber prices will follow more typical seasonal patterns consistent with historical trends and demand, and remain at lower levels in 2023 relative to 2022.

●

Retail sales accounted for 43% of our net sales for the first six months of 2023. When evaluating future demand for the segment, we analyze data such as the same-store sales growth of national home improvement retailers and forecasts of home remodeling activity. Based on this data, we anticipate market demand to be flat to slightly down for the balance of 2023.

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●

Packaging sales accounted for 25% of our net sales for the first six months of 2023. When evaluating future demand, we consider several metrics, including the Purchasing Managers Index (PMI), durable goods manufacturing, and U.S. real GDP. We estimate industrial production to be slightly down for the balance of 2023.

●

Construction sales accounted for 28% of our net sales for the first six months of 2023.

The site-built business unit accounted for approximately 12% of our net sales for the first six months of 2023. Approximately 30% of site-built sales are to multifamily builders. More than 75% of our site-built residential housing sales are in areas such as Texas and the Mid-Atlantic, Southeast, and Mountain West regions, which have experienced significant population growth through migration from other states and are forecasted to continue to grow over the long term. When evaluating future demand, we analyze data from housing starts in those regions. The consensus estimates of all housing starts is for a 12% to 15% decline in 2023.

The factory-built housing business unit accounted for 9% of our net sales for the first six months of 2023. This business, along with our multifamily business, could benefit from higher interest rates as buyers seek more affordable housing alternatives over time. When evaluating future demand, we analyze manufactured housing production data. The National Association of Home Builders forecasts a 24% decrease in manufactured home shipments in 2023.

The commercial construction and concrete forming business units accounted for approximately 6% of our net sales for the first six months of 2023. When evaluating future demand, we analyze data from non-residential construction spending.

●

On a consolidated basis, and based on our 2023 forecasted results of operations and business mix, we currently believe our annual decremental operating margin is in a range of 10% to 15% of net sales (revised from original estimate of 15% to 20%). In other words, we believe for every dollar decrease in sales, relative to the prior year, our earnings from operations may decline by $0.10 to $0.15. Our decremental operating margin for the first six months of 2023 was 12.4%. As a point of reference, our peak to trough decremental operating margin during the Great Recession was approximately 13.5% (2006 peak to 2011 trough). We currently estimate our annual decremental operating margins by segment as follows:

Packaging in a range of 20% to 25% (which was our original estimate). Our decremental operating margin for the first six months of 2023 was 20.8%.

Construction in a range of 14% to 19% (revised from original estimate of 20% to 25%). Our decremental operating margin for the first six months of 2023 was 13.7%.

We currently anticipate improvement in operating profits in our Retail segment in 2023, primarily due to an expectation of less volatile lumber prices in 2023 and other operational improvements. The severe volatility of lumber prices in 2022 and 2021 adversely impacted the results of this segment.

●

Key factors that may impact the ranges provided above include estimates of:

The impact and level of the Lumber Market and trends in the commodity and other material costs of our products

Changes in our selling prices

Changes in our sales mix by segment, business unit, and product

Changes in labor rates

Our ability to reduce variable manufacturing, freight, selling, general, and administrative costs, particularly certain personnel costs, in line with net sales

The results of our salaried bonus plan, which is based on pre-bonus profits and achieving minimum levels of pre-bonus return on investment over a required hurdle rate

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Inflation and other changes in costs

Capital Allocation:

We believe the strength of our cash flow generation and conservative capital structure provides us with sufficient resources to grow our business and also fund returns to our shareholders. We plan to continue to pursue a balanced and return-driven approach to capital allocation across dividends, share buybacks, capital investments and acquisitions. Specifically:

●

On July 26, 2023, our board approved a quarterly cash dividend of $0.30 per share, which represents a 20% increase from the prior year. This dividend will be payable on September 15, 2023, to shareholders of record on September 1, 2023. We continue to consider our payout ratio and yield when determining the appropriate dividend rate.

●

For the first six months of 2023, we repurchased 700,597 shares of our common stock at an average price of $79.20 per share. On July 26, 2023, our board authorized the repurchase of up to $200 million worth of shares of outstanding stock through July 31, 2024. This share authorization supersedes and replaces our prior share repurchase authorizations.

●

We’ve lowered our targeted range for capital expenditures to $175-$200 million, which will continue to be impacted by extended lead times required for most equipment and rolling stock. Priority continues to be given to projects that enhance the working environments of our plants, take advantage of automation opportunities, and drive strategies that have strong long-term growth potential of new and value-added products.

●

We continue to pursue a healthy pipeline of acquisition opportunities of companies that are a strong strategic fit and enhance our capabilities while providing higher margin, return, and growth potential.

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~~enter into any material interest rate swaps, futures contracts or options on futures, or other types of derivative financial instruments to mitigate this risk.

For fixed rate debt, changes in interest rates generally affect the fair market value, but not earnings or cash flows. Conversely, for variable rate debt, changes in interest rates generally do not influence fair market value, but do affect future earnings and cash flows. We do not have an obligation to prepay fixed rate debt prior to maturity, and as a result, interest rate risk and changes in fair market value should not have a significant impact on such debt until we 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. Additionally, certain of our operations enter into transactions that will be settled in a currency other than the U.S. Dollar. We may enter into forward foreign exchange rate contracts in the future to mitigate foreign currency exchange risk. Historically, our hedge contracts are deemed immaterial to the financial statements, however any material hedge contract in the future will be disclosed.

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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 ~~June 25, 2022~~July 1, 2023 (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 ~~June 25, 2022,~~July 1, 2023, 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.

PART II. OTHER INFORMATION

Item 1A. Risk Factors.

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	(1)	(2)	(3)	(4)
April 2 – May 6, 2023	125,000	79.21	125,000	1,424,403
May 7 – June 3, 2023	100,000	82.27	100,000	1,324,403
June 4 – July 1, 2023	25,000	83.50	25,000	1,299,403

~~(a)~~(1)

Total number of shares purchased.

~~(b)~~(2)

Average price paid per share.

~~(c)~~(3)

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

~~(d)~~(4)

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, 2010, our Board authorized 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~~Upon expiration of this authorization on February 3, 2023, the Board gave management authorization to repurchase up to 2 million shares by February 5, 2024. As of July 1, 2023, the total number of remaining shares ~~that may be repurchased~~for repurchase under the program iswas approximately ~~1.4~~1.3 million. On and effective as of July 26, 2023, our board authorized the repurchase of up to $200 million worth of shares of our common stock through the period ending July 31, 2024, which supercedes and replaces the prior authorization.

Item 5. Other Information.

~~None.~~During the quarter ended July 1, 2023, no director or officer adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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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 UFP Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

	(b)	Certificate of the Chief Financial Officer of UFP Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32	Certifications.

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

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

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

	(INS)	iXBRL Instance Document.

	(SCH)	iXBRL Schema Document.

	(CAL)	iXBRL Taxonomy Extension Calculation Linkbase Document.

	(LAB)	iXBRL Taxonomy Extension Label Linkbase Document.

	(PRE)	iXBRL Taxonomy Extension Presentation Linkbase Document.

	(DEF)	iXBRL Taxonomy Extension Definition Linkbase Document.

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

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Table of Contents

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.

	UFP INDUSTRIES, INC.

Date: August ~~3, 2022~~9, 2023	By:	/s/ Matthew J. Missad
	Matthew J. Missad,
	Chairman of the Board, Chief Executive Officer and
	Principal Executive Officer


Date: August ~~3, 2022~~9, 2023	By:	/s/ Michael R. Cole
	Michael R. Cole,
	Chief Financial Officer,
	Principal Financial Officer and
	Principal Accounting Officer

3739


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