UFP INDUSTRIES INC
For the period ended Dec 28, 2024. Filed Feb 26, 2025.
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.
FY2024 · Filed Feb 26, 2025
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 2023-12-30; filed 2024-02-28.
0001558370-24-001963
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent 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 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 2 previous paragraphs and 118 current paragraphs.
1 unchanged; 0 reworded; 117 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 74 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 (117)
Current report
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 report
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 report
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.
Current report
OVERVIEW
Current report
We are pleased to present this overview of 2024. Our results for 2024 were impacted by the following:
Current report
HISTORICAL LUMBER PRICES
Current report
The following table presents the Random Lengths framing lumber composite price.
Current report
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 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.
Current report
IMPACT OF THE LUMBER MARKET ON OUR OPERATING RESULTS
Current report
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 report
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) thetrend in the market price of lumber (i.e. whether the price of lumber is increasing or decreasing within a period or from period to period). Moreover, as explained below, our products are priced differently. Some of our products have fixed selling prices, while the selling prices of other products are indexed to the reported Lumber Market with a fixed dollar adder to cover conversion costs and profits. Consequently, thelevel andtrend of the Lumber Market impact our products differently.
Current report
Below is a general description of the primary ways in which our products are priced.
Current report
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.
Current report
The greatest risk associated with changes in thetrend of lumber prices is on the following products:
Current report
In addition to the impact of the Lumber Market trends on gross margins, changes in thelevel 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 thetrend within each period.
Current report
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. As a result of this factor, 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.
Current report
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 report
BUSINESS COMBINATIONS AND ASSET PURCHASES
Current report
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 report
See Notes to Consolidated Financial Statements, Note C, "Business Combinations" for additional information.
Current report
RESULTS OF OPERATIONS
Current report
The following table presents, for the periods indicated, the components of our Consolidated Statements of Earnings as a percentage of net sales. See “Impact of the Lumber Market on our Operating Results”.
Current report
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 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%.
Current report
OPERATING RESULTS BY SEGMENT
Current report
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 report
The following tables present our operating results by segment for December 28, 2024 and December 30, 2023.
Current 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.
Current report
The following tables present the components of our operating results as a percentage of net sales by segment for December 28, 2024 and December 30, 2023.
Current report
NET SALES
Current report
We design, manufacture and market:
Current report
Our strategic long-term sales objectives include:
Current report
The following table presents, for the periods indicated, our percentage of value-added and commodity-based sales to total sales by our segments.
Current report
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 report
The table below presents new product sales in thousands:
Current report
Retail Segment:
Current 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%.
Current 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.
Current 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.
Showing the first 40 of 117 passages. Open the source sections for the rest.
Removed paragraphs (1)
Previous report
The information required by this item is incorporated by reference from the 2023 Annual Report under the caption "Management’s Discussion and Analysis of Financial Condition and Results of Operations."