UFP INDUSTRIES INC
For the period ended Dec 27, 2025. Filed Feb 25, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 25, 2026
UFPI$79.92-3.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-28; filed 2025-02-26.
0001558370-25-001595
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-27; filed 2026-02-25.
0001104659-26-019567
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 118 previous paragraphs and 116 current paragraphs.
62 unchanged; 42 reworded; 11 added; 13 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 74 previous and 69 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Overall lumber prices in 2025 have increased compared to 2024 despite overall weak demand in the end markets that primarily consume softwood lumber – new housing, housing repair and remodel activity, and industrial (including packaging) – as a result of higher duties on Canadian lumber imported to the United States and capacity curtailments in the U.S. and Canada.
Current report
Net sales from the Retail segment decreased 6% in 2025 compared to 2024 due to a 1% increase in selling prices and a 7% decrease in units. Unit changes within this segment consisted of decreases of 27% in UFP Edge, as we complete the closure of our Bonner, Montana plants and transition production to other facilities, and 6% in ProWood; while Deckorators unit sales were flat. Additionally, our unit sales to big box customers, which we believe are more closely correlated with repair and remodel activity, decreased approximately 7%, while unit sales to independent retailers, which we believe are more closely correlated to new housing starts, decreased approximately 9%. The decline in ProWood volume is primarily due to higher interest rates and weaker consumer sentiment resulting in a softening of demand to complete repair and remodel projects.
Current report
Within our Deckorators business unit, our sales of wood-plastic composite decking and Surestone™ mineral-based-composite decking increased 20%. Of the 20% increase in net sales for our Deckorators business unit, wood-plastic composite decking and mineral based-composite decking (sold under our new Surestone™ tradename) increased 5% and 36% from the prior year, respectively. The increases were offset by railings, which declined 23% from the prior year. The decline in our railing sales is due to lost market share with a big box customer which began impacting sales at the beginning of the year. However, we gained market share with another big box customer which began to more favorably impact the sales of our mineral-based composite decking products beginning in July with most of the growth from these market share gains expected to be realized in 2026. Our long-term goal is to double our market share of composite decking and railing over the next 5 years.
Current report
Gross profits declined by $43 million, or 11%, and totaled $346 million in 2025 compared to $389 million in 2024. The change in gross profit was attributable to the following:
Current report
Selling, general and administrative expenses (“SG&A”) within our Retail segment increased $9 million, or 4%, in 2025 compared to 2024. This increase is a result of a $20 million increase in advertising expenses primarily related to Deckorators. The increase was partially offset by a decrease in wages and benefits of $5 million, a decrease in accrued bonus expense of $5 million, and decreases across several other accounts totaling $1 million. Accrued bonus expense varies with the overall profitability and return on investment of the segment, and totaled approximately $42 million in 2025.
Current report
Net sales from the Packaging segment decreased 2% in 2025 compared to 2024 due to a 2% decrease in selling prices, and a 1% decrease in organic unit sales, partially offset by an acquired business which contributed 1% to unit growth. The decrease in prices is primarily due to competitive price pressure. The decrease in units was due to organic unit declines of 3% in Structural Packaging and 2% in PalletOne, which was partially offset by an increase in unit sales of 8% in Protective Packaging due to geographic expansion and market share gains.
Current report
SG&A expenses within the Packaging segment decreased by approximately $11 million, or 6%, in 2025 compared to 2024. The decrease in SG&A was due to decreases in insurance expense of $3 million, sales incentive compensation of $2 million, travel expenses of $2 million, accrued bonus expense of $2 million, and several smaller decreases in many accounts totaling $2 million. Accrued bonus varies with the overall profitability and return on investment of the segment, and totaled approximately $29 million for 2025.
Current report
Earnings from operations of the Packaging segment decreased by $15 million in 2025, or 15%, compared to 2024 due to the factors discussed above. The losses were offset by net gains on the disposition of assets totaling $3 million, compared to a $7 million loss in 2024.
Current report
Net sales from the Construction segment decreased 5% in 2025 compared to 2024 due to a 5% decrease in selling prices, while unit sales remained flat. Increases in unit sales of 7% in each of our Factory-Built, Commercial, and Concrete Forming business units were fully offset by a decrease in unit sales of 11% in Site-Built.
Current report
Interest expense in 2025 decreased by $2 million compared to 2024 due to a $40 million debt repayment at the end of 2024 on our Series 2012 Senior Note Tranche B, which matured on December 17, 2024. See “Note E of our Consolidated Financial Statements” which are presented under Item 8 below.
Current report
SHORT-TERM DEMAND AND OUTLOOK
Removed paragraphs (13)
Previous report
Lower overall lumber prices in 2024 compared to 2023 is primarily due to increased capacity to produce SYP lumber in the U.S. while end market demand has remained soft. A change in lumber prices impacts our profitability of products sold with fixed and variable prices, as discussed below.
Previous report
The increase in the ratio above is primarily due to a combination of fixed SG&A costs within our Packaging, Construction, and Corporate segments and more competitive pricing in certain business units resulting in a decline in gross profits. For comparison purposes, our SG&A costs as a percentage of gross profits in 2019 (immediately prior to the pandemic) was 64%.
Previous report
Note: As of December 31, 2023, our Pinelli Universal entity was transferred to our Retail segment from our International segment (grouped in All Other) due to changes in our management structure. Prior year figures have been updated to reflect the change for comparability purposes in every applicable table in this filing.
Previous report
We design, manufacture and market:
Previous report
Net sales from the Retail segment decreased 12% in 2024 compared to 2023 due to a 5% decrease in selling prices, a 2% decrease due to the transfer of certain sales to the Construction and Packaging segments, and a 5% decline in units. Unit changes within this segment consisted of decreases of 3% in Deckorators, 6% in UFP Edge, and 5% in ProWood. 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 decreased approximately 4%, while unit sales to independent retailers decreased approximately 7%. Within our Deckorators business unit, our sales of wood-plastic composite decking, mineral-based-composite decking and railing systems increased 4%.
Previous report
Gross profits remained consistent and totaled $388.8 million in 2024 compared to $389.4 million in 2023. Although there was a decline in unit sales and selling prices, the stability in our gross profits was attributable to a variety of factors including the decline in lumber costs, production efficiencies, and operating improvements such as SKU rationalization, all of which contributed to an improved gross margin compared to the prior year.
Previous report
Selling, general and administrative (“SG&A”) expenses decreased by approximately $3.7 million, or 2%, in 2024 compared to 2023. Accrued bonus expense, which varies with the overall profitability and return on investment of the segment, increased approximately $1.5 million and totaled approximately $47.3 million in 2024. The increase was offset by a decrease in professional fees of $1.6 million and many smaller decreases spread over several accounts.
Previous report
Net sales from the Packaging segment decreased 11% in 2024 compared to 2023 due to an 8% decrease in selling prices and a 5% decrease in unit sales, partially offset by a 2% increase due to the transfer of sales from the Retail segment. Unit changes consist of a decrease of 10% in structural packaging and 6% in protective packaging, primarily due to a decline in demand, partially offset by unit growth of 9% in PalletOne due to market share gains. The decline in prices is due to competitive price pressure as well as lower lumber costs.
Previous report
SG&A expenses decreased by approximately $27.6 million, or 13%, in 2024 compared to 2023. Accrued bonus expense, which varies with the overall profitability and return on investment of the segment, decreased approximately $22.8 million, and totaled approximately $31.1 million for 2024. Additionally the decline in SG&A was due to sales incentives which decreased by $4.2 million, travel and entertainment expenses which decreased by $1.6 million, and many smaller decreases spread over several accounts.
Previous report
Earnings from operations of the Packaging segment decreased by $93.0 million in 2024, or 47.5%, compared to 2023 due to the factors discussed above, as well as an increase in the net loss on disposition and impairment of assets which is comprised of intangible asset impairments of $4.2 million and lease impairment charges of $1.7 million.
Previous report
Net sales from the Construction segment decreased 2% in 2024 compared to 2023 due to a 7% decrease in selling prices, partially offset by an increase in unit sales of 4% and a 1% increase due to the transfer of sales from the Retail segment. Unit changes within this segment consisted of an increase of 16% in factory-built housing, primarily due to an increase in industry production, partially offset by decreases of 6% in concrete forming and 6% in commercial construction due to lower demand.
Previous report
Interest expense in 2024 was similar to 2023 due to consistent amounts of outstanding debt during each period as well as fixed interest rates on these debts. See “Note C of Notes to the Consolidated Financial Statements”.
Previous report
SHORT-TERM DEMAND OUTLOOK
Reworded paragraphs (42)
Previous wording
UFP Industries, Inc. is a holding company with subsidiaries in the United States, Mexico, Canada, Spain, India, United Arab Emirates and Australia that design, manufacture, and supply products made from wood, wood and non-wood composites, and other materials to three segments: retail, packaging, and construction. We are headquartered in Grand Rapids, Michigan.
Current wording
UFP Industries, Inc. is a holding company with subsidiaries in the United States, Mexico, Canada, Spain, India and Australia that design, manufacture, and supply products made from wood, wood and non-wood composites, and other materials to three segments: retail, packaging, and construction. We are headquartered in Grand Rapids, Michigan.
Previous wording
This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. We do not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty.
Current wording
This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. We do not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in currency and inflation; fluctuations in the price of lumber; adverse economic conditions in the markets we serve; 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; adverse or unusual weather conditions; inbound and outbound transportation costs; alternatives to replace treated wood products; cybersecurity breaches; tariffs on import and export sales; and potential pandemics. Certain of these risk factors as well as other risk factors and additional information are included in our reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission, included under Item 1A above.
Previous wording
We are pleased to present this overview of 2024. Our results for 2024 were impacted by the following:
Current wording
We are pleased to present this overview of 2025. Our results for 2025 include the following highlights:
Previous wording
In addition, a Southern Yellow Pine (“SYP”) composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately two-thirds of our total lumber purchases.
Current wording
In addition, a Southern Yellow Pine (“SYP”) composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately 75% of our total lumber purchases.
Previous wording
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 40.4% and 43.5% of our net sales in 2024 and 2023, respectively.
Current wording
We generally price our products to pass lumber costs through to our customers so that our profitability is based on the value-added manufacturing, distribution, engineering, and other services we provide. As a result, our dollar sales levels (and working capital requirements) are impacted by the lumber costs of our products. Lumber costs were 41.6% and 40.4% of our net sales in 2025 and 2024, respectively.
Previous wording
It is our long-term goal to increase our gross profits and earnings from operations at a rate of growth that exceeds our unit sales growth, or in other words, increase our profit per unit sold. We also have a long-term goal of improving our efficiencies and leveraging the fixed costs in our selling, general, and administrative expenses as we grow, which would result in a rate of growth of these expenses which is less than our unit sales growth resulting in a lower cost per unit.
Current wording
The results above reflect the impact of generally weaker demand across most of the end markets we serve as well as more competitive pricing and higher material costs for most of 2025. Notwithstanding our recent results, it is our long-term goal to increase our gross profits and earnings from operations at a rate of growth that exceeds our unit sales growth, or in other words, increase our profit per unit sold. We also have a long-term goal of improving our efficiencies and leveraging the fixed costs in our selling, general, and administrative expenses as we grow, which would result in a rate of growth of these expenses which is less than our unit sales growth resulting in a lower cost per unit.
Previous wording
We completed one business acquisition during 2024 and one during 2023. The annual historical sales attributable to these acquisitions in 2024 and 2023 was approximately $25 million and $38 million, respectively. These business combination were not significant to our operating results; consequently pro forma results for 2024 and 2023 are not presented.
Current wording
We completed two business acquisitions during 2025 that had annual historical sales of approximately $24 million in aggregate. During 2024 we completed one business acquisition that had approximately $25 million in annual historical sales. These business combinations were not significant to our operating results; consequently pro forma results for 2025 and 2024 are not presented.
Previous wording
See Notes to Consolidated Financial Statements, Note C, "Business Combinations" for additional information.
Current wording
See Note C “Business Combinations” of our Consolidated Financial Statements which are presented under Item 8 below for additional information.
Previous wording
The following table presents, for the periods indicated, our selling, general, and administrative (SG&A) costs as a percentage of gross profit. We believe this ratio provides an enhanced view of our effectiveness in managing these costs given our strategies to enhance our capabilities and improve our value-added product offering and recognizing the higher relative level of SG&A these strategies require. This ratio also mitigates the impact of changing lumber prices.
Current wording
The following table presents, for the periods indicated, our selling, general, and administrative (SG&A) costs as a percentage of gross profit. Over time, we believe this ratio provides an enhanced view of our effectiveness in managing these costs given our strategies to enhance our capabilities and improve our value-added product offering and recognizing the higher relative level of SG&A these strategies require. This ratio also mitigates the impact of changing lumber prices. The increase in the ratio of SG&A as a percentage of gross profit from the prior year is primarily due to the impact of competitive pricing and higher material costs for most of the year, which has reduced our gross profits.
Previous wording
Our business segments consist of UFP Retail Solutions (“Retail”), UFP Packaging (“Packaging”) and UFP Construction (“Construction”), and align with the end markets we serve. Among other advantages, this structure allows for a more specialized and consistent sales approach, more efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit, and business units are included in our Retail, Packaging, and Construction segments. The exception to this market-centered reporting and management structure is our International segment, which comprises our packaging operations in Mexico, Canada, Spain, India, United Arab Emirates and Australia and sales and buying offices in other parts of the world. Our International segment and Ardellis (our insurance captive) are included in the “All Other” column of the table below. The “Corporate” column includes purchasing, transportation, corporate ventures, and administrative functions that serve our operating segments. Operating results of Corporate primarily consists of over (under) allocated costs. The operating results of UFP Real Estate, Inc., which owns and leases real estate, and UFP Transportation Ltd., which owns, leases, and operates transportation equipment, are also included in the Corporate column. Inter-company lease and services charges are assessed to our operating segments for the use of these assets and services at fair market value rates.
Current wording
Our business segments consist of UFP Retail Solutions, UFP Packaging and UFP Construction, and align with the end markets we serve. Among other advantages, this structure allows for a specialized and consistent sales approach, more efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit, and business units are included in our Retail, Packaging, and Construction segments. The exception to this market-centered reporting and management structure is our International segment, which comprises our packaging operations in Mexico, Canada, Spain, India and Australia and sales and buying offices in other parts of the world. Our International segment and Ardellis (our insurance captive) are included in the “All Other” column of the table below. The “Corporate” includes purchasing, transportation, corporate ventures, and administrative functions that serve our operating segments. Operating results of Corporate primarily consist of over (under) allocated costs and net sales to external customers initiated by UFP Purchasing, which manages supplier relationships and purchases lumber and other materials, UFP Transportation, which owns, leases and operates transportation equipment, and UFP Real Estate, which owns and leases real estate. Inter-company lease and service charges are assessed to our operating segments for the use of these assets and services at fair market value rates.
Previous wording
The following tables present our operating results by segment for December 28, 2024 and December 30, 2023.
Current wording
The following tables present our operating results by segment for December 27, 2025 and December 28, 2024 (in thousands).
Previous wording
Our strategic long-term sales objectives include:
Current wording
We design, manufacture and market wood and wood-alternative products, primarily used to enhance outdoor living environments sold to national home centers and other retailers; engineered wood components, structural lumber, and other products for factory-built and site-built residential and commercial construction; customized interior fixtures used in a variety of retail stores, commercial, and other structures; and structural wood packaging, components and packing materials for various industries. Our strategic long-term sales objectives include:
Previous wording
Our overall unit sales of value-added products decreased approximately 7% in 2024 compared to 2023. Our overall unit sales of commodity-based products decreased approximately 6% compared to 2023.
Current wording
Our overall unit sales of value-added products decreased approximately 1% in 2025 compared to 2024. Our overall unit sales of commodity-based products decreased approximately 3% compared to 2024.
Previous wording
Earnings from operations of the Retail segment increased in 2024 compared to 2023 by $6.9 million, or 4%, as a result of the factors mentioned above, as well as an increase in the net loss on disposition and impairment of assets which comprised of lease impairment charges of $1.4 million and intangible asset impairments of $1.2 million, partially offset by foreign exchange gains totaling $3.0 million.
Current wording
Earnings from operations of the Retail segment decreased in 2025 compared to 2024 by $64 million, or 36%, as a result of the factors mentioned above as well as a foreign exchange loss totaling $1 million and an increase in the net loss on disposition and impairment of assets, which was comprised of machinery and equipment impairments and losses of $11 million, lease impairment charges of $2 million and intangible asset impairment charges of $1 million, partially offset by a gain on the sale of real estate totaling $5 million. The prior year included a $3 million net loss on disposition and impairment of assets which was comprised of lease impairment charges and intangible asset impairments, offset by foreign exchange gains of $3 million.
Previous wording
Gross profits decreased by $114.0 million, or 27%, to $301.3 million in 2024 compared to 2023. The decrease in gross profits was attributable to the following:
Current wording
Gross profits decreased by $36 million, or 12%, to $266 million in 2025 compared to 2024. The decrease in gross profits was attributable to the following:
Previous wording
Gross profits decreased by $85.2 million, or 16% to $438.5 million in 2024 compared to 2023. The decrease in our gross profit was comprised of the following factors:
Current wording
Gross profits decreased by $81 million, or 18%, to $358 million in 2025 compared to 2024. The decrease in our gross profit was comprised of the following:
Previous wording
SG&A expenses decreased by approximately $16.6 million, or 6%, in 2024 compared to 2023. Accrued bonus expense, which varies with the overall profitability of the segment and return on investment, decreased approximately $19.6 million compared to last year and totaled approximately $45.4 million for 2024. The decline in SG&A was also due to decreases in sales incentive of $4.0 million and several smaller decreases in many accounts. The overall decrease was partially offset by an increase in salaries, wages, and benefits of approximately $8.7 million as well as an increase in severance charges totaling $1.3 million.
Current wording
SG&A expenses within the Construction segment decreased by approximately $25 million, or 9%, in 2025 compared to 2024. Accrued bonus expense, which varies with the overall profitability of the segment and return on investment, decreased approximately $10 million compared to last year and totaled approximately $36 million for 2025. The decline in SG&A was also due to decreases in wages and benefits of $4 million, sales incentives of $4 million, insurance costs of $2 million, gains on insurance settlements of $2 million, and several smaller decreases in many accounts totaling $3 million.
Previous wording
Earnings from operations of the Construction reportable segment decreased by $67.7 million in 2024 compared to 2023, or 27.8%, due to the factors mentioned above.
Current wording
Earnings from operations of the Construction reportable segment decreased by $56 million in 2025 compared to 2024, or 32%, due to the factors mentioned above.
Previous wording
The Corporate segment consists of over (under) allocated costs that are not significant.
Current wording
The Corporate segment consists primarily of over (under) allocated costs which are not significant and net sales to external customers initiated by UFP Purchasing, UFP Transportation, and UFP Real Estate.
Previous wording
Interest and investment income increased by $20.6 million in 2024 compared to 2023 due to the increase in cash and a higher interest rate on those deposits.
Current wording
Interest and investment income decreased by $22.0 million in 2025 compared to 2024 due to the decrease in cash and a lower interest rate earned on those deposits as well as an impairment loss of $6.5 million on an investment in our Innov8 Fund recorded in the fourth quarter.
Previous wording
Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for state and local income taxes, and permanent tax differences. Our effective tax rate was 22.5% in 2024 compared to 23.4% in 2023. The decrease in our overall effective tax rate was primarily due to an increase in our estimated tax deduction associated with stock-based compensation accounted for as a permanent difference.
Current wording
Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for state and local income taxes, and permanent tax differences. Our effective tax rate was 24.5% in 2025 compared to 22.5% in 2024. The increase was primarily due to an increase in our state income tax expense as a result of timing differences in the deductibility of R&D costs between federal and state, as well as an increase in nondeductible officer compensation relative to overall income.
Previous wording
As of December 28, 2024, we also had $39.7 million in outstanding letters of credit issued during the normal course of business, as required by some vendor contracts.
Current wording
As of December 27, 2025, we also had $40.4 million in outstanding letters of credit issued during the normal course of business, as required by some vendor contracts.
Previous wording
In general, we fund our growth through a combination of operating cash flows, our revolving credit facility, and issuance of long-term notes payable at times when interest rates are favorable. We have not issued equity to finance growth except in the case of a large acquisition that occurred many years ago. We manage our capital structure by attempting to maintain a targeted ratio of debt to equity and debt to earnings before interest, taxes, depreciation and amortization. We believe these financial ratios are among many other important factors to maintaining a strong credit profile, which in turn helps ensure timely access to capital when needed.
Current wording
In general, we fund our growth through a combination of operating cash flows, our revolving credit facility, and issuance of long-term notes. We have not issued equity to finance growth except in the case of a large acquisition that occurred many years ago. We manage our capital structure by attempting to maintain a targeted ratio of debt to equity and debt to earnings before interest, taxes, depreciation and amortization. We believe these financial ratios are among many other important factors to maintaining a strong credit profile, which in turn helps ensure timely access to capital when needed.
Previous wording
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 resulting in negative or modest cash flows from operations during those periods. Conversely, we 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.
Current wording
Seasonality has a significant impact on our working capital due to our primary selling season occurring during the period from March to September. Consequently, our working capital increases during our first and second quarters resulting in negative or modest cash flows from operations during those periods. Conversely, we 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.
Previous wording
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 are outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle decreased to 60 days in 2024 from 63 days in 2023.
Current wording
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 are outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle increased to 63 days in 2025 from 60 days in 2024.
Previous wording
The decrease in our days supply of inventory in 2024 is due to improvements in inventory turns in our Construction and Packaging segments. The increase in our days of sales outstanding is primarily due to our Retail and Packaging segments. We continue to focus on past due account balances with customers, and the percentage of our accounts receivable that are current was 90% in 2024 compared to 91% in 2023.
Current wording
The increase in our days supply of inventory in 2025 is due to additional safety stock inventory resulting from anticipated supply chain disruptions and new stocking programs in the Deckorators business unit. The increase in our days of sales outstanding is primarily due to the UFP Edge business unit resulting from a decline in sales due to restructuring. We continue to focus on past due account balances with customers, and the percentage of our accounts receivable that are current was 90% in both 2025 and 2024.
Previous wording
Our cash flows from operating activities in 2024 was $643 million, which was comprised of net earnings of $419 million, $173 million of non-cash expenses, and a $51 million decrease in working capital since the end of December 2023. Our cash flows from operations decreased by $317 million compared to last year primarily due to a $237 million decrease in our investment in net working capital compared to the prior year period and a decrease in our net earnings and non-cash expenses of $80 million. In 2023 our net working capital declined significantly as a result of demand normalizing from the peak of the pandemic period.
Current wording
Our cash flows from operating activities in 2025 were $546 million, which was comprised of net earnings of $296 million, $253 million of non-cash expenses, and a $3 million increase in working capital since the end of December 2024. Our cash flows from operations decreased by $97 million compared to last year primarily due to a $54 million increase in our investment in net working capital compared to the prior year period and a decrease in our net earnings and non-cash expenses of $43 million.
Previous wording
Purchases of property, plant, and equipment of $232 million comprised most of our cash used in investing activities during 2024. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, primarily in our Packaging segment and Site-Built, Deckorators and ProWood business units, achieve efficiencies through automation in all segments, and make improvements to a number of facilities. On December 28, 2024, we had outstanding purchase commitments on capital projects of approximately $142.8 million. We intend to fund capital expenditures and purchase commitments through our operating cash flows. Cash used for acquisitions during the year totaled $30 million compared to $52 million in 2023. In 2024, we made one acquisition, C&L Wood Products. See Notes to Consolidated Financial Statements, Note C, “Business Combinations” for additional information.
Current wording
Capital expenditures of $269 million comprised most of our cash used in investing activities during 2025. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, primarily in our Deckorators and ProWood business units, and Packaging segment. Additionally there were investments to achieve efficiencies through automation in all segments and to make improvements to a number of facilities. On December 27, 2025, we had outstanding purchase commitments on capital projects of approximately $135.4 million. We intend to fund capital expenditures and purchase commitments through our operating cash flows. Cash used for acquisitions during the year totaled $18 million compared to $30 million in 2024. In 2025, we completed two acquisitions, RWP West, LLC and National Supply, LLC. See Note C “Business Combinations” of our Consolidated Financial Statements which are presented under Item 8 below for additional information. Our cash used in investing activities was partially offset by $31 million of proceeds from sale of property, plant and equipment as we divest assets that do not meet our profitability targets and strategic objectives.
Previous wording
On December 28, 2024, we had no amount outstanding on our $750 million revolving credit facility. The revolving credit facility also supports letters of credit totaling $37.3 million which includes approximately $3.3 million related to industrial development revenue bonds. As a result, we have approximately $712.7 million in remaining availability. We also had approximately $2.3 million of outstanding letters of credit that were issued outside of the revolving credit facility. Financial covenants on the unsecured revolving credit facility and unsecured notes include minimum interest tests and a maximum leverage ratio. The agreements also restrict the amount of additional indebtedness we may incur and the amount of assets which may be sold. We were in compliance with all our covenant requirements on December 28, 2024.
Current wording
On December 27, 2025, we had no amount outstanding on our $750 million revolving credit facility. The revolving credit facility also supports letters of credit totaling $39.2 million which includes approximately $3.3 million related to industrial development revenue bonds. As a result, we have approximately $710.8 million in remaining availability. We also had approximately $1.3 million of outstanding letters of credit that were issued outside of the revolving credit facility. Financial covenants on the unsecured revolving credit facility and unsecured notes include minimum interest tests and a maximum leverage ratio. The agreements also restrict the amount of additional indebtedness we may incur and the amount of assets which may be sold. We were in compliance with all our covenant requirements on December 27, 2025.
Previous wording
See Notes to Consolidated Financial Statements, Note L, “Commitments, Contingencies, and Guarantees”.
Current wording
See Note L “Commitments, Contingencies, and Guarantees” of our Consolidated Financial Statements which are presented under Item 8 below.
Previous wording
We believe improvements in demand in the end markets we serve and effectively executing our strategies will allow us to achieve our long-term goals below. However, in the short-term, demand in our markets has contracted, primarily due to higher short and long-term interest rates, which will continue to impact our results and vary depending on the severity and duration of this cycle. As a result of these more challenging conditions, we have developed and are executing plans to reduce or eliminate capacity of locations that are not meeting our profitability targets and reduce our SG&A costs. Our goal through these actions is to lower our cost structure and improve our operating profits by $60 million by 2026. We anticipate benefits of approximately $40 million in 2025, including approximately $26 million from planned SG&A cost reductions and $14 million from planned capacity reductions.
Current wording
We believe improvements in demand in the end markets we serve and effectively executing our strategies will allow us to achieve our long-term goals below. However, in the short-term, demand in our markets has contracted due to a variety of macro-economic factors, which will continue to impact our results to varying degrees depending on the severity and duration of this cycle. As a result of these more challenging conditions, we have developed and are executing plans to reduce or eliminate capacity at locations that are not meeting our profitability targets and reduce our SG&A costs. At the beginning of 2025, we announced that our goal through these actions was to improve our operating profits by $60 million by the end of 2026. In 2025, we achieved $35 million of targeted SG&A cost reductions and $7 million of profitability improvements due to capacity consolidations that reduced our cost of goods sold. The reductions in SG&A were partially offset by an additional $20 million of investments in advertising to build our Surestone™ brand of mineral-based composite decking. In 2026, we anticipate capacity consolidations completed in 2025 will reduce our cost of goods sold and improve our profitability by $25 million, primarily in our Retail segment. Therefore, we currently anticipate achieving cumulative cost reductions in 2025 and 2026 totaling $67 million, exceeding our original goal.
Previous wording
The Home Improvement Research Institute (“HIRI”) anticipates growth in home improvement spending and has forecasted 3.9% growth in 2025 and 4.1% annual growth through 2028. We continue to compete for market share for certain retail customers and face intense pricing pressure from other suppliers to this market.
Current wording
The Home Improvement Research Institute (“HIRI”) anticipates growth in home improvement spending and has forecasted 4.0% annual growth from 2026 through 2029. Markets remain competitive and we target market share gains with certain retail customers by introducing new value-add products and focusing on customer service.
Previous wording
Market indicators that should be considered when evaluating future demand for our products in the packaging segment include industrial production, durable goods manufacturing, the Purchasing Managers Index, and U.S. GDP growth.
Current wording
Market indicators that should be considered when evaluating future demand for our products in the packaging segment include industrial production, durable goods manufacturing, the PMI, U.S. GDP growth, and others.
Previous wording
The industry consensus estimate of national housing starts for 2025 is 1.36 million, with estimates generally predicting slightly positive to slightly negative growth in the coming year with single-family generally performing better than multi-family. Housing starts are projected to increase low single-digits in both 2026 and 2027.
Current wording
The industry consensus estimate of national housing starts for 2026 is 1.34 million, with estimates generally predicting flat to slightly negative growth in 2026 with a softer single-family and multi-family outlook. Housing starts are projected to increase low single-digits in 2027.
Previous wording
The National Association of Home Builders forecasts a 2% decrease in manufactured home shipments from 2024 to 2025 and a 2% compounded annual growth rate through 2027.
Current wording
The National Association of Home Builders forecasts a 1% decrease in manufactured home shipments from 2025 to 2026 and a 1% to 2% compounded annual growth rate through 2027.
Previous wording
As a result of more challenging market conditions, we have developed and are executing plans to reduce or eliminate capacity of locations that are not meeting our profitability targets. We anticipate these actions will improve operating profits by $14 million in 2025.
Current wording
As a result of more challenging market conditions, we continue to reduce or eliminate capacity at locations that are not meeting our profitability targets and to better align capacity with current demand. We anticipate these actions will improve operating profits by $25 million in 2026.
Previous wording
As indicated above, we are taking actions to reduce our cost structure to better align it with current demand. We are also investing in the resources needed to achieve our long-term objectives for growth, product innovation, building brand awareness for certain products, and improving our efficiency through technology. With these considerations in mind, we have targeted selling, general, and administrative expenses (SG&A) totaling approximately $565 million in 2025, excluding highly variable sales incentive and bonus expenses tied to profitability and return on investment. This target amount is comparable to our 2024 expenses and is comprised of approximately $26 million of planned cost reductions offset by $6 million of increases primarily associated with new greenfield operations, technology improvements and product innovation, and a $20 million increase in our Deckorators advertising expenses as we invest in building the SureStone brand. Additionally, we anticipate sales incentives will range from 3% to 4% of gross profits and bonus expense will range from 16% to 18% of pre-bonus operating profits plus approximately $31 million associated with the vesting expense of shares granted in prior years under our bonus plan. See Note H — Common Stock for discussion of future compensation costs related to long-term share-based bonus awards.
Current wording
As indicated above, we are taking actions to reduce our cost structure to better align it with current demand. We are also investing in the resources needed to achieve our long-term objectives for growth, product innovation, building brand awareness for certain products, and improving our efficiency through technology. With these considerations in mind, we have targeted “core” selling, general, and administrative expenses (SG&A) totaling approximately $570 million in 2026, excluding highly variable sales incentive and bonus expenses tied to profitability and return on investment, compared to approximately $550 million in 2025 excluding insurance settlement gains. We expect an increase of $20 million in core SG&A primarily due to increases in compensation and related benefits. Additionally, we anticipate sales incentives will be 3% of gross profits (3% of gross profits in 2025) and bonus expense will range from 17% to 18% of pre-bonus operating profits (17% of pre-bonus operating profits in 2025) plus approximately $21 million associated with the vesting expense of shares granted in prior years under our bonus plan ($29 million in 2025). See Note H “Common Stock” of our Consolidated Financial Statements which are presented under Item 8 below for a discussion of future compensation costs related to long-term share-based bonus awards.
Previous wording
Our cash cycle will continue to be impacted in the future by our mix of sales by segment. Sales from our Construction and Packaging segments require a greater investment in receivables than sales to our Retail segment, while our Retail segment generally requires a greater investment in inventory. Also, our net investment in trade receivables, inventory, and accounts payable will continue to be impacted by the level of lumber prices.
Current wording
Our cash cycle will continue to be impacted in the future by our mix of sales by segment. Sales from our Construction and Packaging segments generally require a greater investment in receivables than sales in our Retail segment, while our Retail segment generally requires a greater investment in inventory. Also, our net investment in trade receivables, inventory, and accounts payable will continue to be impacted by the level of lumber prices.
Previous wording
Additionally, we expect to spend approximately $300 million to $350 million on capital expenditures, incur depreciation of approximately $133 million, and incur amortization and other non-cash expenses of approximately $53 million in 2025.
Current wording
Additionally, we expect to spend approximately $300 million to $325 million on capital expenditures, incur depreciation of approximately $153 million, and incur amortization and other non-cash expenses of approximately $50 million in 2026.
Previous wording
On December 28, 2024, we had outstanding purchase commitments on capital projects of approximately $142.8 million. We intend to fund capital expenditures and purchase commitments through our operating cash flows and availability under our revolving credit facility which is considered sufficient to meet these commitments and working capital needs.
Current wording
On December 27, 2025, we had outstanding purchase commitments on capital projects of approximately $135.4 million. We intend to fund capital expenditures and purchase commitments through our operating cash flows and availability under our revolving credit facility which is considered sufficient to meet these commitments and working capital needs.
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Current report — wording carried from elsewhere
Finally, a Spruce Pine Fir (“SPF”) composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately 12% of our total lumber purchases.
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Previous report — wording carried elsewhere
Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in currency and inflation; fluctuations in the price of lumber; adverse economic conditions in the markets we serve; 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; adverse or unusual weather conditions; inbound and outbound transportation costs; alternatives to replace treated wood products; cybersecurity breaches; tariffs on import and export sales; and potential pandemics. Certain of these risk factors as well as other risk factors and additional information are included in our reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.