10-Q

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 September 24, 2022

OR

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

Commission File Number 0-22684

UFP INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Michigan	38-1465835
(State or other jurisdiction of incorporation or	(I.R.S. Employer Identification Number)
organization)
2801 East Beltline NE, Grand Rapids, Michigan	49525
(Address of principal executive offices)	(Zip Code)

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

NONE

(Former name or former address, if changed since last report.)

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 September 24, 2022
Common stock, $1 par value	61,637,514

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

UFP INDUSTRIES, INC.

TABLE OF CONTENTS

PART I.		FINANCIAL INFORMATION.	Page No.
	Item 1.	Financial Statements	3
		Condensed Consolidated Balance Sheets at September 24, 2022, December 25, 2021 and September 25, 2021	3
		Condensed Consolidated Statements of Earnings and Comprehensive Income for the Three and Nine Months Ended September 24, 2022 and September 25, 2021	4
		Condensed Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 24, 2022 and September 25, 2021	5
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 24, 2022 and September 25, 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	36
	Item 4.	Controls and Procedures	36
PART II.		OTHER INFORMATION
	Item 1.	Legal Proceedings – NONE
	Item 1A.	Risk Factors - NONE	37
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
	Item 3.	Defaults upon Senior Securities – NONE
	Item 4.	Mine Safety Disclosures – NONE
	Item 5.	Other Information – NONE	37
	Item 6.	Exhibits	37

2

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share data)
	September 24,		December 25,		September 25,
	2022		2021		2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	449,135	$	286,662	$	138,637
Restricted cash		729		4,561		17,592
Investments		33,113		36,495		33,723
Accounts receivable, net		877,776		737,805		783,959
Inventories:
Raw materials		425,765		416,043		368,185
Finished goods		581,118		547,277		532,480
Total inventories		1,006,883		963,320		900,665
Refundable income taxes		28,771		4,806		14,134
Other current assets		39,956		39,827		34,040
TOTAL CURRENT ASSETS		2,436,363		2,073,476		1,922,750
DEFERRED INCOME TAXES		3,139		3,462		2,330
RESTRICTED INVESTMENTS		19,552		19,310		18,925
RIGHT OF USE ASSETS		101,001		96,703		94,481
OTHER ASSETS		94,090		31,876		29,168
GOODWILL		319,183		315,038		292,318
INDEFINITE-LIVED INTANGIBLE ASSETS		7,332		7,369		7,380
OTHER INTANGIBLE ASSETS, NET		113,880		109,017		93,984
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment		1,323,896		1,212,113		1,156,070
Less accumulated depreciation and amortization		(679,889)		(623,093)		(603,159)
PROPERTY, PLANT AND EQUIPMENT, NET		644,007		589,020		552,911
TOTAL ASSETS		3,738,547		3,245,271		3,014,247
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Cash overdraft	$	4,174	$	17,030	$	10,812
Accounts payable		323,404		319,125		292,933
Accrued liabilities:
Compensation and benefits		298,384		289,196		249,242
Other		111,596		84,853		90,348
Current portion of lease liability		23,767		23,155		22,242
Current portion of long-term debt		41,536		42,683		93
TOTAL CURRENT LIABILITIES		802,861		776,042		665,670
LONG-TERM DEBT		275,417		277,567		310,119
LEASE LIABILITY		80,903		76,632		75,548
DEFERRED INCOME TAXES		62,436		60,964		39,198
OTHER LIABILITIES		40,628		37,497		46,238
TOTAL LIABILITIES		1,262,245		1,228,702		1,136,773
TEMPORARY EQUITY:
Redeemable noncontrolling interest	$	7,563	$	—	$	—
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, 61,637,514, 61,901,851 and 61,887,770		61,638		61,902		61,888
Additional paid-in capital		284,025		243,995		239,563
Retained earnings		2,102,764		1,678,121		1,552,593
Accumulated other comprehensive loss		(11,348)		(5,405)		(3,278)
Total controlling interest shareholders’ equity		2,437,079		1,978,613		1,850,766
Noncontrolling interest		31,660		37,956		26,708
TOTAL SHAREHOLDERS’ EQUITY		2,468,739		2,016,569		1,877,474
TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ EQUITY	$	3,738,547	$	3,245,271	$	3,014,247

See notes to consolidated condensed financial statements.

3

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

AND COMPREHENSIVE INCOME

(Unaudited)

(in thousands, except per share data)
	Three Months Ended				Nine Months Ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
NET SALES	$	2,322,855	$	2,093,784	$	7,713,042	$	6,619,329
COST OF GOODS SOLD		1,872,679		1,766,229		6,281,051		5,583,926
GROSS PROFIT		450,176		327,555		1,431,991		1,035,403
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		214,327		169,467		649,015		504,104
OTHER (GAINS) LOSS, NET		(1,195)		(10,037)		1,341		(11,248)
EARNINGS FROM OPERATIONS		237,044		168,125		781,635		542,547
INTEREST EXPENSE		3,516		3,433		10,213		10,483
INTEREST AND INVESTMENT LOSS (INCOME)		1,658		371		6,905		(3,614)
EQUITY IN EARNINGS OF INVESTEE		1,208		946		2,740		2,411
		6,382		4,750		19,858		9,280
EARNINGS BEFORE INCOME TAXES		230,662		163,375		761,777		533,267
INCOME TAXES		58,561		37,628		188,692		127,909
NET EARNINGS		172,101		125,747		573,085		405,358
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST		(4,860)		(4,706)		(13,023)		(7,624)
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST	$	167,241	$	121,041	$	560,062	$	397,734
EARNINGS PER SHARE – BASIC	$	2.68	$	1.94	$	8.93	$	6.40
EARNINGS PER SHARE – DILUTED	$	2.66	$	1.94	$	8.89	$	6.38
OTHER COMPREHENSIVE INCOME:
NET EARNINGS		172,101		125,747		573,085		405,358
OTHER COMPREHENSIVE LOSS		(4,477)		(2,024)		(5,676)		(1,500)
COMPREHENSIVE INCOME		167,624		123,723		567,409		403,858
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		(4,273)		(4,496)		(13,290)		(7,608)
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST	$	163,351	$	119,227	$	554,119	$	396,250

See notes to consolidated condensed financial statements.

4

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				Temporary
	Stock		Capital		Earnings		Earnings		Interest		Total		Equity
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 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	$	—
Net earnings						167,241				4,380		171,621		480
Foreign currency translation adjustment								(3,330)		(29)		(3,359)		(558)
Unrealized loss on debt securities								(560)				(560)
Distributions to noncontrolling interest										(9,970)		(9,970)
Redeemable noncontrolling interest										(7,641)		(7,641)		7,641
Cash dividends - $0.25 per share - quarterly						(15,405)						(15,405)
Issuance of 10,678 shares under employee stock purchase plans		11		641								652
Net forfeitures of 6,396 shares under stock grant programs		(6)		(159)		6						(159)
Issuance of 10,705 shares under deferred compensation plans		10		(10)								—
Expense associated with share-based compensation arrangements				7,407								7,407
Accrued expense under deferred compensation plans				1,085								1,085
Balance on September 24, 2022	$	61,638	$	284,025	$	2,102,764	$	(11,348)	$	31,660	$	2,468,739	$	7,563

5

UFP INDUSTRIES, INC.

(in thousands, except share and per share data)
	Controlling Interest Shareholders’ Equity
							Accumulated
			Additional				Other
	Common		Paid-In		Retained		Comprehensive		Noncontrolling
	Stock		Capital		Earnings		Earnings		Interest		Total
Balance on December 27, 2020	$	61,206	$	218,224	$	1,182,680	$	(1,794)	$	22,836	$	1,483,152
Net earnings						103,311				940		104,251
Foreign currency translation adjustment								(374)		(526)		(900)
Unrealized loss on debt securities								(1,296)				(1,296)
Distributions to noncontrolling interest										(2,914)		(2,914)
Cash dividends - $0.15 per share - quarterly						(9,274)						(9,274)
Issuance of 5,816 shares under employee stock purchase plan		6		357								363
Net issuance of 536,970 shares under stock grant programs		537		3,888		5						4,430
Issuance of 89,690 shares under deferred compensation plans		89		(89)								—
Expense associated with share-based compensation arrangements				2,936								2,936
Accrued expense under deferred compensation plans				5,795								5,795
Balance on March 27, 2021	$	61,838	$	231,111	$	1,276,722	$	(3,464)	$	20,336	$	1,586,543
Net earnings						173,382				1,978		175,360
Foreign currency translation adjustment								1,759		720		2,479
Unrealized gain on debt securities								241				241
Cash dividends - $0.15 per share - quarterly						(9,276)						(9,276)
Issuance of 9,282 shares under employee stock purchase plan		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
Net earnings						121,041				4,706		125,747
Foreign currency translation adjustment								(1,897)		(210)		(2,107)
Unrealized gain on debt securities								83				83
Additional purchase and adjustment of noncontrolling interest										(822)		(822)
Cash dividends - $0.15 per share - quarterly						(9,281)						(9,281)
Issuance of 10,008 shares under employee stock purchase plan		10		573								583
Net issuance of 17,165 shares under stock grant programs		17		(115)								(98)
Issuance of 9,864 shares under deferred compensation plans		10		(10)								—
Expense associated with share-based compensation arrangements				2,657								2,657
Accrued expense under deferred compensation plans				1,149								1,149
Balance on September 25, 2021	$	61,888	$	239,563	$	1,552,593	$	(3,278)	$	26,708	$	1,877,474

See notes to consolidated condensed financial statements.

6

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)	Nine Months Ended
	September 24,		September 25,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	573,085	$	405,358
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation		68,881		61,741
Amortization of intangibles		13,448		9,369
Expense associated with share-based and grant compensation arrangements		19,979		8,444
Deferred income taxes (credit)		(269)		(594)
Unrealized loss (gain) on investments and other		8,453		(1,756)
Equity in loss of investee		2,740		2,411
Net loss (gain) on sale and disposition of assets		352		(10,482)
Changes in:
Accounts receivable		(137,607)		(141,088)
Inventories		(36,259)		(204,144)
Accounts payable and cash overdraft		(11,247)		53,437
Accrued liabilities and other		31,490		99,067
NET CASH FROM OPERATING ACTIVITIES		533,046		281,763
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(113,725)		(110,092)
Proceeds from sale of property, plant and equipment		2,303		26,597
Acquisitions, net of cash received and purchase of equity method investment		(105,212)		(433,275)
Purchases of investments		(16,925)		(17,866)
Proceeds from sale of investments		10,036		9,857
Other		911		(3,478)
NET CASH USED IN INVESTING ACTIVITIES		(222,612)		(528,257)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		570,700		886,966
Repayments under revolving credit facilities		(571,075)		(888,335)
Repayments of debt		(1,957)		—
Contingent consideration payments and other		(2,564)		(2,664)
Proceeds from issuance of common stock		2,110		1,519
Dividends paid to shareholders		(43,420)		(27,831)
Distributions to noncontrolling interest		(12,023)		(2,914)
Repurchase of common stock		(93,215)		—
Other		(210)		(334)
NET CASH USED IN FINANCING ACTIVITIES		(151,654)		(33,593)
Effect of exchange rate changes on cash		(139)		(292)
NET CHANGE IN CASH AND CASH EQUIVALENTS		158,641		(280,379)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR		291,223		436,608
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	$	449,864	$	156,229
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	$	449,135	$	138,637
Restricted cash, end of period		729		17,592
Cash, cash equivalents, and restricted cash, end of period	$	449,864	$	156,229
SUPPLEMENTAL INFORMATION:
Interest paid	$	9,997	$	10,360
Income taxes paid		213,117		136,893
NON-CASH INVESTING ACTIVITIES
Capital expenditures included in accounts payable		3,211		2,366
NON-CASH FINANCING ACTIVITIES:
Common stock issued under deferred compensation plans		8,424		6,778

See notes to consolidated condensed financial statements.

7

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. All intercompany transactions and balances have been eliminated.

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

Seasonality has a significant impact on our working capital from March to August, which historically results in negative or modest cash flows from operations in our first and second quarters. Conversely, we experience a substantial decrease in working capital from September to February which typically results in significant cash flow from operations in our third and fourth quarters. For comparative purposes, we have included the September 25, 2021 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. 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.

8

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):

	September 24, 2022								September 25, 2021
	Quoted		Prices with						Quoted		Prices with
	Prices in		Other			Prices with			Prices in		Other			Prices with
	Active		Observable			Unobservable			Active		Observable			Unobservable
	Markets		Inputs			Inputs			Markets		Inputs			Inputs
	(Level 1)		(Level 2)			(Level 3)	Total		(Level 1)		(Level 2)			(Level 3)	Total
Money market funds	$	19	$	4,825	$	—	$	4,844	$	19	$	2,631	$	—	$	2,650
Fixed income funds		2,584		16,321		—		18,905		962		17,021		—		17,983
Treasury securities		343		—		—		343		310		—		—		310
Equity securities		15,674		—		—		15,674		18,543		—		—		18,543
Alternative investments		—		—		4,136		4,136		—		—		3,536		3,536
Mutual funds:
Domestic stock funds		11,859		—		—		11,859		9,968		—		—		9,968
International stock funds		1,279		—		—		1,279		1,675		—		—		1,675
Target funds		8		—		—		8		23		—		—		23
Bond funds		132		—		—		132		146		—		—		146
Alternative funds		527		—		—		527		497		—		—		497
Total mutual funds		13,805		—		—		13,805		12,309		—		—		12,309
Total	$	32,425	$	21,146	$	4,136	$	57,707	$	32,143	$	19,652	$	3,536	$	55,331
Assets at fair value	$	32,425	$	21,146	$	4,136	$	57,707	$	32,143	$	19,652	$	3,536	$	55,331

From the assets measured at fair value as of September 24, 2022, listed in the table above, $33.2 million of mutual funds, equity securities, and alternative investments are held in Investments, $4.7 million of money market funds are held in Cash and Cash Equivalents, $0.5 million of money market and mutual funds are held in Other Assets for our deferred compensation plan, and $19.2 million of fixed income funds and $0.1 million of money market funds are 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 $52.4 million as of September 24, 2022, 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):

	September 24, 2022						September 25, 2021
			Unrealized						Unrealized
	Cost		Gain (Loss)		Fair Value		Cost		Gain		Fair Value
Fixed Income	$	21,199	$	(2,294)	$	18,905	$	17,293	$	690	$	17,983
Treasury Securities		343		—		343		310		—		310
Equity		15,392		282		15,674		14,392		4,151		18,543
Mutual Funds		13,430		(128)		13,302		9,210		2,435		11,645
Alternative Investments		3,079		1,057		4,136		3,370		166		3,536
Total	$	53,443	$	(1,083)	$	52,360	$	44,575	$	7,442	$	52,017

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 unrealized loss of the portfolio was $1.1 million. Carrying amounts above are recorded in the investments and restricted investments line items within the balance sheet as of September 24, 2022 and September 25, 2021.

C.       REVENUE RECOGNITION

Within the three primary segments (Retail, Industrial, and 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.

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.

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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					Nine Months Ended
	September 24,		September 25,			September 24,		September 25,
	2022		2021		% Change	2022		2021		% Change
Point in Time Revenue	$	2,270,438	$	2,063,647	10.0%	$	7,571,128	$	6,530,204	15.9%
Over Time Revenue		52,417		30,137	73.9%		141,914		89,125	59.2%
Total Net Sales		2,322,855		2,093,784	10.9%	$	7,713,042	$	6,619,329	16.5%

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):

	September 24,		December 25,		September 25,
	2022		2021		2021
Cost and Earnings in Excess of Billings	$	8,477	$	5,602	$	3,776
Billings in Excess of Cost and Earnings		10,743		10,744		10,373

D.       EARNINGS PER SHARE

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

	Three Months Ended				Nine Months Ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Numerator:
Net earnings attributable to controlling interest	$	167,241	$	121,041	$	560,062	$	397,734
Adjustment for earnings allocated to non-vested restricted common stock		(6,857)		(3,952)		(21,970)		(12,800)
Net earnings for calculating EPS	$	160,384	$	117,089	$	538,092	$	384,934
Denominator:
Weighted average shares outstanding		62,445		62,266		62,743		62,162
Adjustment for non-vested restricted common stock		(2,560)		(2,033)		(2,461)		(2,001)
Shares for calculating basic EPS		59,885		60,233		60,282		60,161
Effect of dilutive restricted common stock		307		168		255		137
Shares for calculating diluted EPS		60,192		60,401		60,537		60,298
Net earnings per share:
Basic	$	2.68	$	1.94	$	8.93	$	6.40
Diluted	$	2.66	$	1.94	$	8.89	$	6.38

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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 September 24, 2022, 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 September 24, 2022, we had outstanding purchase commitments on commenced capital projects of approximately $65.4 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. 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 September 24, 2022, we had approximately $22.7 million in outstanding payment and performance bonds for open projects. We had approximately $30.6 million in payment and performance bonds outstanding for completed projects which are still under warranty.

On September 24, 2022, we had outstanding letters of credit totaling $59.9 million, primarily related to certain insurance contracts and industrial development revenue bonds described further below.

In lieu of cash deposits, we provide irrevocable letters of credit in favor of our insurers to guarantee our performance under certain insurance contracts. As of September 24, 2022, we have irrevocable letters of credit outstanding totaling approximately $52.8 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 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 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 third quarter of 2022 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 September 2021, which were accounted for using the purchase or equity method. Dollars below are in thousands unless otherwise noted:

					Net
Company	Acquisition		Intangible		Tangible		Operating
Name	Date	Purchase Price	Assets		Assets		Segment
	June 27, 2022	$65,858 cash paid for equity method investment	$	32,048	$	33,810	Industrial
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.
	May 9, 2022	$15,398 cash paid for 100% asset purchase	$	4,821	$	10,577	Retail
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.
	December 27, 2021	$24,057 cash paid for 100% stock purchase, net of acquired cash	$	17,484	$	6,573	Retail
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	$10,831 cash paid for 70% stock purchase and noncontrolling interest, net of acquired cash	$	9,562	$	1,269	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.

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UFP INDUSTRIES, INC.

					Net
Company	Acquisition		Intangible		Tangible		Operating
Name	Date	Purchase Price	Assets		Assets		Segment
	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).
	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.

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 September 2021 and not consolidated with other operations contributed approximately $93.3 million in net sales and $6.1 million in operating profits during the first nine months of 2022.

As a result of the investment in Dempsey on June 27, 2022, we own 50% of the issued equity of the Company, 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 September 24, 2022, the carrying value of our investment in Dempsey is $67.0 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.

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 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, and Construction segments. In the case of locations which serve multiple segments, results are allocated and accounted for by segment.

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UFP INDUSTRIES, INC.

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 September 24, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	845,304	$	584,808	$	777,126	$	112,203	$	3,414	$	2,322,855
Intersegment net sales		87,362		19,778		31,352		102,927		(241,419)		—
Earnings from operations		28,932		77,298		110,384		13,705		6,725		237,044

	Three Months Ended September 25, 2021
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	696,201	$	573,234	$	722,872	$	98,689	$	2,788	$	2,093,784
Intersegment net sales		50,546		23,148		27,574		122,470		(223,738)		—
Earnings from operations		(26,153)		70,408		84,205		20,283		19,382		168,125

	Nine Months Ended September 24, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	2,959,976	$	1,872,510	$	2,538,973	$	332,186	$	9,397	$	7,713,042
Intersegment net sales		220,922		63,438		88,570		338,592		(711,522)		—
Earnings from operations		124,856		253,899		322,034		51,268		29,578		781,635

	Nine Months Ended September 25, 2021
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	2,714,440	$	1,633,289	$	2,021,106	$	243,736	$	6,758	$	6,619,329
Intersegment net sales		163,279		66,039		62,069		345,920		(637,307)		—
Earnings from operations		89,443		190,344		184,330		44,565		33,865		542,547

The following table presents goodwill by segment as of September 24, 2022, and December 25, 2021 (in thousands):

	Retail		Industrial		Construction		All Other		Corporate		Total
Balance as of December 25, 2021	$	73,376	$	128,541	$	89,000	$	24,121	$	—	$	315,038
2022 Acquisitions		11,958		—		—		—		—		11,958
2022 Purchase Accounting Adjustments		293		(5,830)		(1,074)		659		—		(5,952)
Foreign Exchange, Net		—		—		(215)		(1,646)		—		(1,861)
Balance as of September 24, 2022	$	85,627	$	122,711	$	87,711	$	23,134	$	—	$	319,183

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UFP INDUSTRIES, INC.

The following table presents total assets by segment as of September 24, 2022, and December 25, 2021 (in thousands).

	Total Assets by Segment
	September 24,		December 25,
Segment Classification	2022		2021		% Change
Retail	$	975,733	$	844,189	15.6	%
Industrial		855,240		741,672	15.3
Construction		834,917		736,157	13.4
All Other		324,113		343,363	(5.6)
Corporate		748,544		579,890	29.1
Total Assets	$	3,738,547	$	3,245,271	15.2	%

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 25.4% in the third quarter of 2022 compared to 23.0% in the third quarter of 2021 and was 24.8% in the first nine months of 2022 compared to 24.0% for the same period in 2021. The increase was primarily due to one-time tax credits recorded as discrete items in 2021 that are not available in 2022.

I.       COMMON STOCK

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

	September 24, 2022
Share Issuance Activity	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	34	$	71.65
Shares issued under the employee stock gift program	2		78.60
Shares issued under the director retainer stock program	3		83.24
Shares issued under the bonus plan	755		82.73
Shares issued under the executive stock match plan	62		82.87
Forfeitures	(13)
Total shares issued under stock grant programs	809	$	82.73
Shares issued under the deferred compensation plans	102	$	82.36

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

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UFP INDUSTRIES, INC.

	September 25, 2021
Share Issuance Activity	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	25	$	71.18
Shares issued under the employee stock gift program	2		76.80
Shares issued under the director retainer stock program	4		69.80
Shares issued under the bonus plan	487		57.06
Shares issued under the executive stock grants plan	77		60.24
Forfeitures	(21)
Total shares issued under stock grant programs	549	$	57.64
Shares issued under the deferred compensation plans	108	$	62.48

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

J.       INVENTORIES

Inventories are stated at the lower of cost or net realizable value. The cost of inventories includes raw materials, direct labor, and manufacturing overhead. Cost is determined on a weighted average FIFO basis. Raw materials consist primarily of unfinished wood products and other materials expected to be manufactured or treated prior to sale, while finished goods represent various manufactured and treated wood products ready for sale.

We write down the value of inventory, the impact of which is reflected in cost of goods sold in the Condensed Consolidated Statement of Earnings and Comprehensive Income, if the cost of specific inventory items on hand exceeds the amount we expect to realize from the ultimate sale or disposal of the inventory. These estimates are based on management's judgment regarding future demand and market conditions and analysis of historical experience. There was no lower of cost or net realizable value adjustment to inventory as of September 24, 2022 and the lower of cost or net realizable value adjustment to inventory as September 25, 2021 was $1.3 million.

K.       SUBSEQUENT EVENTS

Subsequent to our reporting date, we repurchased approximately 32,000 shares for $2.2 million, at an average share price of $69.31.

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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 North America, Europe, Asia, and Australia that supply wood, wood composite and other products to three markets: retail, industrial, and construction. We are headquartered in Grand Rapids, Michigan. For more information about UFP Industries, Inc., or our 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 not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in the price of lumber; adverse or unusual weather conditions; adverse economic conditions in the markets we serve; government regulations, particularly involving environmental and safety regulations, government imposed “stay at home” orders and directives to cease or curtail operations; and our ability to make successful business acquisitions. Certain of these risk factors as well as other risk factors and additional information are included in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission. We are pleased to present this overview of the third quarter of 2022.

OVERVIEW

Our results for the third quarter of 2022 include the following highlights:

● Our net sales were up 11% compared to the third quarter of 2021, which was comprised of a 6% increase in selling prices, a 2% increase in unit sales due to acquisitions completed since September of last year, and a 3% increase in organic unit sales. The overall increase in our selling prices is due to a combination of higher lumber  prices and operating costs, an improvement in our product mix of value-added products which tend to be sold on a fixed price, elevated end market demand, and our value-based selling initiatives. Organic unit growth of 6% in our construction segment and 5% in our retail segment was offset by an organic unit decline of 2% in our industrial segment.

● Our gross profits increased by $122.6 million, or 37.4%, compared to the same period of the prior year. Acquired operations contributed $8.3 million to the increase in our gross profits. Excluding the impact of acquisitions, gross profits increased by $114.3 million. We estimate that value-added products contributed $62.9 million and commodity-based products contributed $51.4 to the increase in gross profit.

● Our operating profits increased $68.9 million, or 41%, compared to the third 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 and selective selling practices have enabled us to improve our profit per unit. Acquisitions contributed approximately $3.7 million to our increase in operating profits.

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UFP INDUSTRIES, INC.

● Our cash flows from operations for the first nine months of 2022 increased to $535 million compared to $282 million of cash flows provided by operations during the first nine months of 2021. The improved cash flows resulted from net earnings and non-cash expenses totaling $687 million, compared to $475 million last year, offset by a $152 million increase in net working capital since the end of last year, compared to a $193 million increase in the prior year. This year, customer demand, particularly in our retail segment, followed more typical seasonal trends which allowed us to improve our inventory turns.

● Our cash surplus at the end of September 2022 was $134.6 million compared to net debt (debt and cash overdraft less cash) of $182.4 million at the end of September 2021. Our unused borrowing capacity under revolving credit facilities and a shelf agreement with certain lenders along with our cash surplus resulted in total liquidity of approximately $1.5 billion at the end of the third quarter of 2022.

HISTORICAL LUMBER PRICES

We experience significant fluctuations in the cost of commodity lumber products from primary producers (“Lumber Market”). The following table presents the Random Lengths framing lumber composite price:

	Random Lengths Composite
	Average $/MBF
	2022			2021
January	$	1,112		$	890
February		1,225			954
March		1,321			1,035
April		1,051			1,080
May		948			1,428
June		670			1,344
July		621			690
August		625			443
September		556			412
Third quarter average	$	601		$	515
Year-to-date average	$	903		$	920
Third quarter percentage change		16.7	%
Year-to-date percentage change		(1.8)	%

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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
	Average $/MBF
	2022			2021
January	$	1,010		$	858
February		1,115			903
March		1,198			938
April		902			922
May		732			1,150
June		574			1,052
July		547			564
August		589			448
September		533			438
Third quarter average	$	556		$	483
Year-to-date average	$	800		$	808
Third quarter percentage change		15.1	%
Year-to-date percentage change		(1.0)	%

The sequential decrease in overall lumber prices for the third quarter of the year was primarily due to demand in the retail and housing markets beginning to return to more normalized levels and improvements in supply chain constraints. 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 sales levels (and working capital requirements) are impacted by the lumber costs of our products. Lumber costs were 51.9% and 58.0% of our sales in the first nine months of 2022 and 2021, respectively. The decrease from the prior year ratio reflects an improvement in our sales mix of value-added products as well as our value-based selling practices.

Our gross margins are impacted by (1) the relative level of the Lumber Market (i.e. whether prices are higher or lower from comparative periods), and (2) the trend in the market price of lumber (i.e. whether the price of lumber is increasing or decreasing within a period or from period to period). Moreover, as explained below, our products are priced differently. Some of our products have fixed selling prices, while the selling prices of other products are indexed to the reported Lumber Market with a fixed dollar adder to cover conversion costs and profits. Consequently, the level and trend of the Lumber Market impact our products differently.

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

● Products with fixed selling prices. These products include value-added products, such as 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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UFP INDUSTRIES, INC.

● 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 levels of inventory. Because lumber costs are incurred in advance of final sale prices, subsequent increases or decreases in the market price of lumber impact our gross margins. We believe our sales of these products are at their highest relative level in our third quarter, primarily due to pressure-treated lumber sold in our retail segment.

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

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

● Products with significant inventory levels with low turnover rates, whose selling prices are indexed to the Lumber Market. In other words, the longer the period of time these products remain in inventory, the greater the exposure to changes in the price of lumber. This would include treated lumber, which comprised approximately 22% of our total net sales in the first nine months of 2022. 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 inventory consignment programs with our vendors. We estimate that 17.3% of our total purchases for the first nine months of 2022 were completed 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 three business acquisitions during the first nine months of fiscal 2022 and nine during all of fiscal 2021. The annual historical sales attributable to acquisitions completed in the first nine months of fiscal 2022 was approximately $131 million, while the annual historical sales attributable to acquisitions completed during the last quarter of 2021 was approximately $76 million. These business combinations were not significant to our quarterly results individually or in aggregate and thus pro forma results for 2022 and 2021 are not presented.

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				Nine Months Ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	80.6		84.4		81.4		84.4
Gross profit	19.4		15.6		18.6		15.6
Selling, general, and administrative expenses	9.2		8.1		8.4		7.6
Other (gains) losses, net	(0.1)		(0.5)		—		(0.2)
Earnings from operations	10.2		8.0		10.1		8.2
Other expense, net	0.3		0.2		0.3		0.1
Earnings before income taxes	9.9		7.8		9.9		8.1
Income taxes	2.5		1.8		2.4		1.9
Net earnings	7.4		6.0		7.4		6.1
Less net earnings attributable to noncontrolling interest	(0.2)		(0.2)		(0.2)		(0.1)
Net earnings attributable to controlling interest	7.2	%	5.8	%	7.3	%	6.0	%

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				Nine Months Ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Units sold	5.0	%	13.0	%	5.0	%	30.0	%
Gross profit	37.4		35.9		38.3		68.8
Selling, general, and administrative expenses	26.5		25.9		28.7		40.9
Earnings from operations	41.0		57.7		44.1		110.6

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UFP INDUSTRIES, INC.

The following table presents, for the periods indicated, our selling, general, and administrative expenses (SG&A) as a percentage of gross profit. Given our strategies to enhance our capabilities and improve our value-added product offering, and recognizing the higher relative level of SG&A these strategies require, we believe this ratio provides an enhanced view of our effectiveness in managing these costs and mitigates the impact of changing lumber prices.

	Three Months Ended				Nine Months Ended
		September 24,		September 25,		September 24,		September 25,
		2022		2021		2022		2021
Gross profit	$	450,176	$	327,555	$	1,431,991	$	1,035,403
Selling, general, and administrative expenses	$	214,327	$	169,467	$	649,015	$	504,104
SG&A as percentage of gross profit		47.6%		51.7%		45.3%		48.7%

Bonus expense, which is a component of SG&A, increased in the third quarter to $58 million compared to $44 million in the prior year. Modifications made to our bonus plan during 2022 are 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 19.0% of pre-bonus earnings from operations from a historical rate of approximately 21.0%. Bonus rates continue to be derived based on return on investment achieved. Bonus expense in the first nine months of 2022 totaled $183 million compared to $141 million in the prior year.

Operating Results by Segment:

Our business segments consist of UFP Retail Solutions, UFP Industrial and UFP Construction, and align with the end markets we serve. Among other things, this structure allows for a more specialized and consistent sales approach among Company operations, more efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit and business units are included in our Retail, Industrial, and Construction segments. The exception to this market-centered reporting and management structure is our International segment, which comprises our Mexico, Canada, Europe, Asia, and Australia operations and sales and buying offices in other parts of the world. Our International segment and Ardellis (our insurance captive) are included in the “All Other” column of the table below. The “Corporate” column includes purchasing, transportation and administrative functions that serve our operating segments. Operating results of Corporate primarily consists of over (under) allocated costs. The operating results of UFP Real Estate, Inc., which owns and leases real estate, and UFP Transportation Ltd., which owns, leases, and operates transportation equipment, are also included in the Corporate column. Inter-company lease and services charges are assessed to our operating segments for the use of these assets and services at fair market value rates.

The following tables present our operating results, for the periods indicated, by segment (in thousands).

	Three Months Ended September 24, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales	$	845,304	$	584,808	$	777,126	$	112,203	$	3,414	$	2,322,855
Cost of goods sold		767,841		440,975		577,552		82,740		3,571		1,872,679
Gross profit		77,463		143,833		199,574		29,463		(157)		450,176
Selling, general, administrative expenses		48,435		66,521		89,455		16,752		(6,836)		214,327
Other		96		14		(265)		(994)		(46)		(1,195)
Earnings from operations	$	28,932	$	77,298	$	110,384	$	13,705	$	6,725	$	237,044

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UFP INDUSTRIES, INC.

	Three Months Ended September 25, 2021
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales	$	696,201	$	573,234	$	722,872	$	98,689	$	2,788	$	2,093,784
Cost of goods sold		685,369		446,822		568,809		63,082		2,147		1,766,229
Gross profit		10,832		126,412		154,063		35,607		641		327,555
Selling, general, administrative expenses		36,899		55,723		70,663		15,996		(9,814)		169,467
Other		86		281		(805)		(672)		(8,927)		(10,037)
Earnings from operations	$	(26,153)	$	70,408	$	84,205	$	20,283	$	19,382	$	168,125

	Nine Months Ended September 24, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales	$	2,959,976	$	1,872,510	$	2,538,973	$	332,186	$	9,397	$	7,713,042
Cost of goods sold		2,674,996		1,417,006		1,950,671		230,100		8,278		6,281,051
Gross profit		284,980		455,504		588,302		102,086		1,119		1,431,991
Selling, general, administrative expenses		159,490		200,987		266,430		49,733		(27,625)		649,015
Other		634		618		(162)		1,085		(834)		1,341
Earnings from operations	$	124,856	$	253,899	$	322,034	$	51,268	$	29,578	$	781,635

	Nine Months Ended September 25, 2021
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales	$	2,714,440	$	1,633,289	$	2,021,106	$	243,736	$	6,758	$	6,619,329
Cost of goods sold		2,480,804		1,292,102		1,644,069		160,853		6,098		5,583,926
Gross profit		233,636		341,187		377,037		82,883		660		1,035,403
Selling, general, administrative expenses		144,375		150,739		193,144		40,021		(24,175)		504,104
Other		(182)		104		(437)		(1,703)		(9,030)		(11,248)
Earnings from operations	$	89,443	$	190,344	$	184,330	$	44,565	$	33,865	$	542,547

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UFP INDUSTRIES, INC.

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

	Three Months Ended September 24, 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	90.8		75.4		74.3		73.7		—	80.6
Gross profit	9.2		24.6		25.7		26.3		—	19.4
Selling, general, administrative expenses	5.7		11.4		11.5		14.9		—	9.2
Other	—		—		—		(0.9)		—	—
Earnings from operations	3.4	%	13.2	%	14.2	%	12.2	%	—	10.2	%

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

	Three Months Ended September 25, 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	98.4		77.9		78.7		63.9		—	84.4
Gross profit	1.6		22.1		21.3		36.1		—	15.6
Selling, general, administrative expenses	5.3		9.7		9.8		16.2		—	8.1
Other	—		—		(0.1)		(0.7)		—	(0.5)
Earnings from operations	(3.8)	%	12.3	%	11.6	%	20.6	%	—	8.0	%

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

	Nine Months Ended September 24, 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	90.4		75.7		76.8		69.3		—	81.4
Gross profit	9.6		24.3		23.2		30.7		—	18.6
Selling, general, administrative expenses	5.4		10.7		10.5		15.0		—	8.4
Other	0.2		—		—		0.3		—	—
Earnings from operations	4.2	%	13.6	%	12.7	%	15.4	%	—	10.1	%

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

	Nine Months Ended September 25, 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	91.4		79.1		81.3		66.0		—	84.4
Gross profit	8.6		20.9		18.7		34.0		—	15.6
Selling, general, administrative expenses	5.3		9.2		9.6		16.4		—	7.6
Other	—		—		—		(0.7)		—	(0.2)
Earnings from operations	3.3	%	11.7	%	9.1	%	18.3	%	—	8.2	%

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

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UFP INDUSTRIES, INC.

NET SALES

We design, manufacture and market wood and wood-alternative products, primarily used to enhance outdoor living environments, for national home centers and other retailers, 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:

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

	% Change
	in Sales		in Selling  Prices		in Units		Acquisition Unit Change		Organic Unit Change
Third quarter 2022 versus third quarter 2021	10.9	%	5.9	%	5.0	%	2.0	%	3.0	%
Year-to-date 2022 versus year-to-date 2021	16.5	%	11.5	%	5.0	%	3.0	%	2.0	%

● 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 internationally.

● Increasing our sales of "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 to the retail market, structural wood packaging, engineered wood components, customized interior fixtures, manufactured and assembled concrete forms, and "wood alternative" products. Engineered wood components include roof trusses, wall panels, and floor systems. Wood alternative products consist of products manufactured with wood and non-wood composites, metal, and plastics. Although we consider the treatment of dimensional lumber and panels with certain chemical preservatives a value-added process, treated lumber is not presently included in the value-added sales totals. Remanufactured lumber and panels that are components of finished goods are also generally categorized as “commodity-based” products.

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 September 24, 2022				Three Months Ended September 25, 2021
	Value-Added		Commodity-Based		Value-Added		Commodity-Based
Retail	46.6	%	53.4	%	48.6	%	51.4	%
Industrial	73.8	%	26.2	%	69.2	%	30.8	%
Construction	81.1	%	18.9	%	74.5	%	25.5	%
All Other and Corporate	76.7	%	23.3	%	70.7	%	29.3	%
Total Sales	66.3	%	33.7	%	64.1	%	35.9	%

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UFP INDUSTRIES, INC.

	Nine Months Ended September 24, 2022				Nine Months Ended September 25, 2021
	Value-Added		Commodity-Based		Value-Added		Commodity-Based
Retail	44.2	%	55.8	%	43.3	%	56.7	%
Industrial	70.6	%	29.4	%	66.6	%	33.4	%
Construction	75.9	%	24.1	%	70.5	%	29.5	%
All Other and Corporate	74.9	%	25.1	%	71.6	%	28.4	%
Total Sales	62.2	%	37.8	%	58.2	%	41.8	%
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 approximately 9% in the third quarter of 2022 compared to 2021, comprised of a 4% contribution from acquisitions and 5% organic growth. Our overall unit sales of value-added products increased approximately 7% in the first nine months of 2022 compared to the same period last year, comprised of a 3% contribution from acquisitions and 4% organic growth. Our organic unit sales of commodity-based products increased approximately 1% quarter-over-quarter and our overall unit sales of commodity-based products increased approximately 4% in the first nine months of 2022 compared to the same period last year, comprised of a 3% contribution from acquisitions and 1% organic growth.

● Developing new products. We define new products as those that will generate sales of at least $1 million per year within 4 years of launch and are still growing and gaining market penetration. New product sales in the third quarter of 2022 increased 38%. Approximately $303 million of new product sales for the first nine months of 2021, while still sold, were sunset in 2022 and excluded from the table below because they no longer meet the definition above. Through the first nine months of the year, we will have exceeded our goal of annual new product sales of at least $525 million in 2022.

The table below presents new product sales in thousands:

	New Product Sales by Segment						New Product Sales by Segment
	Three Months Ended						Nine Months Ended
	September 24,		September 25,		%		September 24,		September 25,		%
	2022		2021		Change		2022		2021		Change
Retail	$	80,237		56,847	41.1	%	$	247,410	$	176,814	39.9	%
Industrial		63,965		42,066	52.1	%		203,388		107,544	89.1	%
Construction		33,300		28,858	15.4	%		111,098		71,157	56.1	%
All Other and Corporate		481		763	(37.0)	%		1,875		1,671	12.2	%
Total New Product Sales		177,983		128,534	38.5	%	$	563,771	$	357,186	57.8	%
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 third quarter of 2022 increased by 21% compared to the same period of 2021, primarily due to a 15% increase in selling prices, a 2% decrease due to the transfer of certain product sales to the Construction segment this year, an organic unit increase of 5%, and unit growth from acquisitions of 3%. We experienced organic unit growth in our Sunbelt (20%), UFP Edge (17%), Deckorators (8%), and ProWood (8%) business units. These increases were offset by organic unit decreases in our Outdoor Essentials (17%) and Handprint (13%) business units. Capacity expansion contributed to our unit increases in UFP Edge and our Deckorators mineral-based composite decking. Finally, sales to big box customers were up 30%, while sales to independent retailers increased 7%.

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UFP INDUSTRIES, INC.

Gross profits increased by $66.6 million, or 615% to $77.5 million for the third quarter of 2022 compared to the same period last year. The increase in gross profit was attributable to the following:

● The gross profits of our Sunbelt and ProWood business units increased by a total of $54.4 million, primarily due to a more stable lumber market this year compared to the same period of 2021. The products sold by these units consist primarily of pressure treated lumber sold at a variable price tied to the lumber market.

● Our UFP Edge and Deckorators business units contributed $7.8 million to the increase in gross profits.

● Acquired operations contributed $2.9 million to the increase in gross profits.

● The transfer of certain concrete forming business unit sales to the Construction segment partially offset the increase in gross profit by $2.7 million.

SG&A increased by approximately $11.5 million, or 31.3%, in the third quarter of 2022 compared to the same period of 2021. SG&A of recently acquired businesses added roughly $1.7 million to overall SG&A. Accrued bonus expense, which varies with our overall profitability and return on investment, increased approximately $5.1 million from the third quarter of 2021 and totaled approximately $8.0 million for the quarter. The remaining increase was primarily due to increases in salaries and wages of $1.9 million, sales incentive compensation of $0.5 million, and travel related expenses of $0.5 million.

Earnings from operations for the Retail reportable segment in the third quarter of 2022 were $28.9 million compared to a loss from operations in 2021 of $26.2 million, as a result of the factors mentioned above.

Net sales in the first nine months of 2022 increased by 9% compared to the same period of 2021, due to a 7% increase in selling prices and acquisition unit growth of 5%, offset by a 2% decrease due to the transfer of certain sales to the Construction segment, and an organic unit decrease of 1%. We experienced organic unit growth in our UFP Edge (9%), ProWood (1%), and Sunbelt (1%) business units. This increase was offset by organic unit decreases in our Deckorators (5%),Outdoor Essentials (15%), and Handprint (18%) business units. Capacity expansion contributed to our unit increase in UFP Edge. Finally, sales to big box customers increased 11%, while sales to independent retailers increased 3%.

Gross profits increased by $51.3 million, or 22.0% to $285.0 million for the first nine months of 2022 compared to the same period last year. Our increase in gross profit was attributable to the following:

● The gross profits of our Sunbelt and ProWood business units increased by a total of $36.6 million, primarily due to the same factors discussed above.

● Acquired operations contributed $17.3 million to the increase in gross profits.

● The transfer of certain concrete forming business unit sales to the Construction segment partially offset the increase in gross profit by $9.4 million.

SG&A increased by approximately $15.1 million, or 10.5%, in the first nine months of 2022 compared to the same period of 2021. SG&A of recently acquired businesses added $5.8 million to overall SG&A. Accrued bonus expense, which varies with our overall profitability and return on investment, decreased approximately $5.4 million and totaled approximately $32.5 million for the first nine months of 2022. Bonus expense decreased due to the plan modification disclosed above. The remaining increase in SG&A was primarily due to increases in salaries and wages of $3.8 million, advertising of $2.0 million, travel-related expenses of $1.9 million, bad debt expenses of $1.1 million and employee benefits of $1.1 million.

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UFP INDUSTRIES, INC.

Earnings from operations for the Retail reportable segment increased in the first nine months of 2022 compared to 2021 by $35.4 million, or 39.6%, as a result of the factors mentioned above.

Industrial Segment

Net sales in the third quarter of 2022 increased 2% compared to the same period of 2021, due to a 1% increase in selling prices and acquisition unit growth of 3%, offset by a 2% decrease in organic unit sales. The components of our change in organic unit sales includes increases associated with $12 million in sales to new customers, $22 million of sales to new locations of existing customers, and $12 million of new product sales. These increases were offset by decreases in unit sales on other accounts.

Gross profits increased by $17.4 million, or 13.8%, for the third quarter of 2022 compared to the same period last year. Acquisitions contributed $3.7 million to the increase in gross profit. The remaining increase 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, as well as favorable changes in our value-added sales mix. Excluding acquisitions, we estimate that value-added products contributed an $18.6 million increase in gross profit, while commodity-based products experienced a $4.9 million decline in gross profit. Value-added sales increased to 73.8% of total net sales in the third quarter of 2022 compared to 69.2% of total net sales in the third quarter of 2021. The increase in value-added sales and gross profits is due in part to new products which contributed $7.3 million to gross profits this year ($1.5 million from acquisitions).

SG&A increased by approximately $10.8 million, or 19.4%, in the third quarter of 2022 compared to the same period of 2021. Acquired operations since the third quarter of 2021 contributed approximately $2.2 million to our increase in costs. Accrued bonus expense, which varies with our overall profitability and return on investment, increased approximately $1.2 million relative to the third quarter of 2021, and totaled $19.9 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 $4.9 million and travel related expenses of $0.6 million.

Earnings from operations for the Industrial reportable segment increased in the third quarter of 2022 compared to 2021 by $6.9 million, or 9.8%, due to the factors discussed above.

Net sales in the first nine months of 2022 increased 15% compared to the same period of 2021, due to a 16% increase in selling prices and acquisition unit growth of 2%, offset by a 3% decrease in organic unit sales.  The increase in our selling prices is a result of passing along higher lumber prices and other operating costs, 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 increases associated with $44 million in sales to new customers, $64 million of sales to new locations of existing customers, and $80 million of new product sales ($16.7 million from acquisitions). These increases were offset by decreases in unit sales on other accounts.

Gross profits increased by $114.3 million, or 33.5%, for the first nine months of 2022 compared to the same period last year. Acquisitions contributed $6.8 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 $104.7 million and $2.8 million, respectively, to the increase in gross profit. Value-added sales increased to 70.6% of total net sales in the first nine months of 2022 compared to 66.6% of total net sales in the first nine months of 2021. The increase in value-added sales and gross profits is due in part to new products which contributed $33 million to gross profits this year ($4.6 million from acquisitions).

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UFP INDUSTRIES, INC.

SG&A increased by approximately $50.2 million, or 33.3%, in the first nine months of 2022 compared to the same period of 2021. Acquired operations since the first nine months of 2021 contributed approximately $4.5 million to our increase in costs. Accrued bonus expense, which varies with our overall profitability and return on investment, increased approximately $12.9 million, and totaled $63.3 million for the nine 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 $12.9 million, sales incentive compensation of $6.2 million, travel related expenses of $1.6 million, medical benefits expense of $1.3 million, and salaries and wages of $1.0 million.

Earnings from operations for the Industrial reportable segment increased in the first nine months of 2022 compared to 2021 by $63.6 million, or 33.4%, due to the factors discussed above.

Construction Segment

Net sales in the third quarter of 2022 increased 8% compared to the same period of 2021, due to organic unit sales growth of 6% and a 2% increase due to the transfer of certain sales from the Retail segment. Organic unit changes within this segment consist of increases of 36% in commercial construction, 36% in concrete forming, 9% in factory-built housing, offset by a 7% decrease in site-built construction.

● The organic increase in commercial is due primarily to an increase in customer demand in its retail business. As of September 24, 2022 and December 25, 2021, we estimate that backlog orders associated with commercial construction approximated $101.2 million and $84.6 million, respectively.

● The organic unit increase in concrete forming is comprised of a 30% increase in our value-added unit sales and a 6% increase in our commodity-based unit sales. The unit increase in value-added sales is due to an increase in manufactured and assembled concrete forms and engineered wood product sales to new customers and existing customers as well as geographic expansion in the northeast.

● The organic unit increase in factory-built is primarily due to an increase in industry production.

● 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 September 24, 2022 and December 25, 2021, we estimate that backlog orders associated with site-built construction approximated $118.1 million and $113.5 million, respectively.

Gross profits increased by $45.5 million, or 29.5%, for the third quarter of 2022 compared to the same period of 2021. The increase in our gross profit was comprised of the following factors:

● Gross profits in our site-built construction business unit increased by $39.2 million as a result of being more selective in the business that we take during this period of elevated demand and capacity constraints.

● Gross profits in our factory-built housing business unit decreased $4.6 million due to the impact of falling market prices on certain variable priced products.

● The gross profit of our commercial construction business unit increased $6.4 million as a result of increased unit sales, better productivity and other operational improvements, as well as improved pricing discipline.

● The gross profit of our concrete forming business unit increased by $4.5 million, including $2.7 million as a result of the transfer of sales from the Retail segment.

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UFP INDUSTRIES, INC.

SG&A increased by approximately $18.8 million, or 26.6%, in the third quarter of 2022 compared to the same period of 2021. Accrued bonus expense, which varies with our overall profitability and return on investment, increased approximately $8.0 million, and totaled $27.5 million for the quarter. Bonus expense was also impacted by previously discussed modifications in our plan. The remaining increase was primarily due to increases in professional fees of $2.6 million, sales incentive compensation of $2.2 million, bad debt expense of $1.3 million, salaries and wages of $1.1 million, and travel related expenses of $0.5 million.

Earnings from operations for the Construction reportable segment increased in the third quarter of 2022 compared to 2021 by $26.2 million, or 31.1%, due to the factors mentioned above.

Net sales in the first nine months of 2022 increased 25.6% compared to the same period of 2021, due to a 13% increase in selling prices, 3% due to the transfer of certain product sales from the Retail segment, and organic unit sales growth of 10%. Organic unit changes within this segment consisted of increases of 30% in concrete forming, 43% in commercial construction, and 14% in factory-built housing. The organic unit sales of our site-built business unit decreased by 3% due to capacity constraints.

Gross profits increased by $211.3 million, or 56.0%, for the first nine months of 2022 compared to the same period of 2021. The increase in our gross profit was comprised of the following factors:

● Gross profits in our site-built construction business unit increased by $147.6 million as a result of being more selective in the business that we take during this period of elevated demand and capacity constraints.

● Gross profits in our factory-built housing business unit increased $31.6 million as a result of increased unit sales and leveraging fixed costs. In addition, value-added sales in this business unit increased to 56.5% of total net sales in the first nine months of 2022 compared to 49.4% of total net sales in the first nine months of 2021. The increase in new product sales contributed approximately $2.5 million in gross profits this year.

● The gross profit of our concrete forming business unit increased by $14.6 million, including $9.4 million as a result of the transfer of sales from the Retail segment.

● The gross profit of our commercial construction business unit increased $16.2 million as a result of increased unit sales, better productivity and other operational improvements, as well as improved pricing discipline.

● Acquired businesses contributed $1.2 million.

SG&A increased by approximately $73.3 million, or 37.9%, in the first nine months of 2022 compared to the same period of 2021. Acquired operations since the first nine months of 2021 contributed approximately $1.2 million to the increase in SG&A. Accrued bonus expense, which varies with our overall profitability and return on investment, increased approximately $32.6 million, and totaled $78.8 million for the first nine months of 2022. Bonus expense was also impacted by previously discussed modifications in our plan. The remaining increase was primarily due to increases in sales incentive compensation of $18.0 million, bad debt expense of $4.0 million, salaries and wages of $3.0 million, professional fees of $2.2 million, travel related expenses of $1.9 million, and medical benefits of $1.2 million.

Earnings from operations for the Construction reportable segment increased in the first nine months of 2022 compared to 2021 by $137.7 million, or 74.7%, due to the factors mentioned above.

All Other Segment

Our All Other reportable segment consists of our International and Ardellis (our insurance captive) segments that are not significant.

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UFP INDUSTRIES, INC.

Corporate

The corporate segment consists of over (under) allocated costs that are not significant, and in the prior year it also consisted of gains on the sale of certain real estate.

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 25.4% in the third quarter of 2022 compared to 23.0% in the third quarter of 2021 and was 24.8% in the first nine months of 2022 compared to 24.0% for the same period in 2021. The increase was primarily due to one-time tax credits recorded as discrete items in 2021 that are not available in 2022.

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):

	Nine Months Ended
	September 24,		September 25,
	2022		2021
Cash from operating activities	$	533,046	$	281,763
Cash used in investing activities		(222,612)		(528,257)
Cash used in financing activities		(151,654)		(33,593)
Effect of exchange rate changes on cash		(139)		(292)
Net change in all cash and cash equivalents		158,641		(280,379)
Cash, cash equivalents, and restricted cash, beginning of period		291,223		436,608
Cash, cash equivalents, and restricted cash, end of period	$	449,864	$	156,229

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. 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 in negative or modest cash flows from operations during those periods. Conversely, we typically experience a substantial decrease in working capital once we move beyond our peak selling season which typically results in significant cash flows from operations in our third and fourth quarters.

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UFP INDUSTRIES, INC.

Due to the seasonality of our business and the effects of the Lumber Market, we believe our cash cycle (days of sales outstanding plus days supply of inventory less days payables outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle decreased to 55 days from 57 days during the third quarter of 2022 compared to the prior year period.

	Three Months Ended				Nine Months Ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Days of sales outstanding		35		35		34		34
Days supply of inventory		40		43		39		38
Days payables outstanding		(20)		(21)		(20)		(20)
Days in cash cycle		55		57		53		52

The decrease in our cash cycle in the third quarter of 2022 compared to the same period of 2021 was primarily due to a three day decrease in our days supply of inventory partially offset by a one day decrease in our payables cycle. The decrease in our days supply of inventory in the third quarter was due to more typical seasonal demand trends in the current year which allowed us to improve our inventory turns.

Our cash flows from operations for the first nine months of 2022 increased to $533 million compared to $282 million of cash from operations during the first nine months of 2021. This improvement in operational cash flows is due to net earnings and non-cash expenses totaling $687 million, compared to $475 million last year, offset by a $154 million increase in net working capital since the end of last year, compared to a $193 million increase in the prior year. This year, customer demand, particularly in our retail segment, followed more typical seasonal trends which allowed us to improve our inventory turns.

Purchases of property, plant, and equipment and acquisitions (refer to Note F for Business Combinations) comprised most of our cash used in investing activities during the first nine months of 2022 and totaled $113.7 million and $105.2 million, respectively. Net purchases of investments totaled $6.9 million. Total proceeds from the sales of property, plant, and equipment were $2.3 million. Outstanding purchase commitments on existing capital projects totaled approximately $65.4 million on September 24, 2022. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, achieve efficiencies through automation, make improvements to a number of facilities, and increase our transportation capacity (tractors, trailers) in 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 approximately $175 million on capital projects for the year subject to significant variability due to extended supplier lead times. Notable areas 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 our capacity to produce machine-built pallets and engineered wood components, and take advantage of automation opportunities.

Cash flows from financing activities consisted of cash paid for repurchases of common stock of $93.2 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. The total number of remaining shares that may be repurchased under the program is approximately 1.4 million. Dividends paid during the first nine months of 2022 include first quarter dividends of $12.5 million ($0.20 per share) and second and third quarter dividends of $30.9 million ($0.25 per share). On October 19, 2022, the Board approved a quarterly dividend payment of $0.25 per share, payable on December 15, 2022, to shareholders of record on December 1, 2022. Net repayments of debt were approximately $2.3 million and distributions to noncontrolling interests were $12.0 million. We have debt maturities of $38.7 million due in December of this year which we intend to repay through operating cash flows and available cash balances.

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UFP INDUSTRIES, INC.

On September 24, 2022, we had $6.9 million outstanding on our $550 million revolving credit facility, and we had approximately $536.0 million in remaining availability after considering $7.1 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 September 24, 2022.

At the end of the third quarter of 2022, we have approximately $1.5 billion in total liquidity, consisting of our net cash surplus and remaining availability under our revolving credit facility and a shelf agreement with certain lenders providing up to $500 million in borrowing capacity.

ENVIRONMENTAL CONSIDERATIONS AND REGULATIONS

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

CRITICAL ACCOUNTING POLICIES

In preparing our consolidated financial statements, we follow accounting principles generally accepted in the United States. These principles require us to make certain estimates and apply judgments that affect our financial position and 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.

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 10% EBITDA margin by continuing to enhance our capabilities and grow our portfolio of value-added products.

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

● Maintain a conservative capital structure.

We believe the effective execution of our strategies will allow us to achieve these long-term goals in the future. However, current economic conditions indicate the U.S. economy is either in or headed towards a recession, which will impact our results and vary depending on its severity and duration. The following factors should be considered when evaluating our future results:

● Retail sales accounted for 38% of our net sales for the first nine months of 2022. 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.

● Industrial sales accounted for 24% of our net sales for the first nine months of 2022. When evaluating future demand, we consider a number of metrics, including the Purchasing Managers Index (PMI), durable goods manufacturing, and U.S. real GDP.

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UFP INDUSTRIES, INC.

● Construction sales accounted for 31% of our net sales for the first nine months of 2022.

- The site-built business unit accounted for approximately 14% of our net sales for the first nine months of 2022. Approximately one-third of site-built customers are 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 in the long term. When evaluating future demand, we analyze data from housing starts in those regions.

- The factory-built business unit accounted for 13% of our net sales for the first nine months of 2022. This business, along with our multifamily business, could benefit from higher interest rates as buyers seek more affordable housing alternatives. As a result of these factors, we believe these customers are better insulated from downturns in the housing market. When evaluating future demand, we analyze data from production of manufactured housing.

- The commercial and concrete forming business units accounted for approximately 6% of our net sales for the first nine months of 2022. When evaluating future demand, we analyze data from non-residential construction spending.

● On a consolidated basis, and based on our 2022 forecasted results of operations and business mix, we believe our decremental operating margin is in a range of 15% to 20% of net sales. In other words, we believe for every dollar decrease in sales, relative to the prior year, our earnings from operations may decline by $0.15 to $0.20. 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 estimate that our decremental margins by segment are as follows:

- Retail is in a range of 5% to 10%

- Industrial is in a range of 20% to 25%

- Construction is in a range of 20% to 25%

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

- Changes in our selling prices

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

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

- 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

- Inflation and other changes in costs

Capital Allocation:

We believe the strength of our cash flow generation and conservative capital structure will provide us with sufficient resources to grow our business and also return to 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:

● Our board just approved another quarterly dividend of $0.25 per share share, representing an increase of 67% from the prior year. We continue to consider our payout ratios and yield when determining the appropriate rate.

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UFP INDUSTRIES, INC.

● For the first nine months of 2022, we repurchased 1.2 million shares of our stock at an average price of $77.06. We have remaining authorization to repurchase up to an additional 1.4 million shares through the balance of the year and will continue to do so at times when the price hits our pre-established target.

● Capital expenditures in 2022 are likely to be at or below the low end of our targeted capital expenditures range of $175-$225 million, due to the 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 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.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. With the participation of management, our chief executive officer and chief financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15e and 15d – 15e) as of the quarter ended September 24, 2022 (the “Evaluation Date”), have concluded that, as of such date, our disclosure controls and procedures were effective.

(b) Changes in Internal Controls. During the quarter ended September 24, 2022, there were no changes in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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UFP INDUSTRIES, INC.

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)
June 26 – July 30, 2022	—	—	—	1,394,248
July 31 – August 27, 2022	—	—	—	1,394,248
August 28 – September 24, 2022	—	—	—	1,394,248

(a) Total number of shares purchased.

(b) Average price paid per share.

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

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

On November 14, 2001, the Board of Directors approved a share repurchase program (which succeeded a previous program) allowing us to repurchase up to 2.5 million shares of our common stock. On October 14, 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 total number of remaining shares that may be repurchased under the program is approximately 1.4 million.

Item 5. Other Information.

None.

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.

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UFP INDUSTRIES, INC.

	(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).

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: November 3, 2022	By:	/s/ Matthew J. Missad
	Matthew J. Missad,
	Chief Executive Officer and Principal Executive Officer
Date: November 3, 2022	By:	/s/ Michael R. Cole
	Michael R. Cole,
	Chief Financial Officer,
	Principal Financial Officer and
	Principal Accounting Officer

38

EX-31.A

Exhibit 31(a)

UFP Industries, Inc.

Certification

I, Matthew J. Missad, certify that:

1. I have reviewed this report on Form 10-Q of UFP Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2022	/s/ Matthew J. Missad
	Matthew J. Missad,
	Chief Executive Officer and Principal Executive Officer

EX-31.B

Exhibit 31(b)

UFP Industries, Inc.

Certification

I, Michael R. Cole, certify that:

1. I have reviewed this report on Form 10-Q of UFP Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2022	/s/ Michael R. Cole
	Michael R. Cole
	Chief Financial Officer and Principal Accounting Officer

EX-32.A

Exhibit 32(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):

I, Matthew J. Missad, Chief Executive Officer of UFP Industries, Inc., certify, to the best of my knowledge and belief, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) that:

(1) The quarterly report on Form 10-Q for the quarterly period ended September 24, 2022, which this statement accompanies, fully complies with requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in this quarterly report on Form 10-Q for the quarterly period ended September 24, 2022, fairly presents, in all material respects, the financial condition and results of operations of UFP Industries, Inc.

	UFP INDUSTRIES, INC.
Date: November 3, 2022	By: /s/ Matthew J. Missad
	Matthew J. Missad,
	Chief Executive Officer and Principal Executive Officer

The signed original of this written statement required by Section 906, or any other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to UFP Industries, Inc. and will be retained by UFP Industries, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.B

Exhibit 32(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):

I, Michael R. Cole, Chief Financial Officer of UFP Industries, Inc., certify, to the best of my knowledge and belief, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) that:

(1) The quarterly report on Form 10-Q for the quarterly period ended September 24, 2022, which this statement accompanies, fully complies with requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in this quarterly report on Form 10-Q for the quarterly period ended September 24, 2022, fairly presents, in all material respects, the financial condition and results of operations of UFP Industries, Inc.

	UFP INDUSTRIES, INC.
Date: November 3, 2022	By: /s/ Michael R. Cole
	Michael R. Cole,
	Chief Financial Officer and Principal Financial Officer

The signed original of this written statement required by Section 906, or any other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to UFP Industries, Inc. and will be retained by UFP Industries, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information	9 Months Ended
	Sep. 24, 2022 shares
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 24, 2022
Entity File Number	0-22684
Entity Registrant Name	UFP INDUSTRIES, INC.
Entity Incorporation, State or Country Code	MI
Entity Tax Identification Number	38-1465835
Entity Address, Address Line One	2801 East Beltline NE
Entity Address, City or Town	Grand Rapids
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	49525
City Area Code	616
Local Phone Number	364-6161
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	UFPI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)	61,637,514
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000912767
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 24, 2022	Dec. 25, 2021	Sep. 25, 2021
CURRENT ASSETS:
Cash and cash equivalents	$ 449,135	$ 286,662	$ 138,637
Restricted cash	729	4,561	17,592
Investments	33,113	36,495	33,723
Accounts receivable, net	877,776	737,805	783,959
Inventories:
Raw materials	425,765	416,043	368,185
Finished goods	581,118	547,277	532,480
Total inventories	1,006,883	963,320	900,665
Refundable income taxes	28,771	4,806	14,134
Other current assets	39,956	39,827	34,040
TOTAL CURRENT ASSETS	2,436,363	2,073,476	1,922,750
DEFERRED INCOME TAXES	3,139	3,462	2,330
RESTRICTED INVESTMENTS	19,552	19,310	18,925
RIGHT OF USE ASSETS	101,001	96,703	94,481
OTHER ASSETS	94,090	31,876	29,168
GOODWILL	319,183	315,038	292,318
INDEFINITE-LIVED INTANGIBLE ASSETS	7,332	7,369	7,380
OTHER INTANGIBLE ASSETS, NET	113,880	109,017	93,984
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment	1,323,896	1,212,113	1,156,070
Less accumulated depreciation and amortization	(679,889)	(623,093)	(603,159)
PROPERTY, PLANT AND EQUIPMENT, NET	644,007	589,020	552,911
TOTAL ASSETS	3,738,547	3,245,271	3,014,247
CURRENT LIABILITIES:
Cash overdraft	4,174	17,030	10,812
Accounts payable	323,404	319,125	292,933
Accrued liabilities:
Compensation and benefits	298,384	289,196	249,242
Other	111,596	84,853	90,348
Current portion of lease liability	23,767	23,155	22,242
Current portion of long-term debt	41,536	42,683	93
TOTAL CURRENT LIABILITIES	802,861	776,042	665,670
LONG-TERM DEBT	275,417	277,567	310,119
LEASE LIABILITY	80,903	76,632	75,548
DEFERRED INCOME TAXES	62,436	60,964	39,198
OTHER LIABILITIES	40,628	37,497	46,238
TOTAL LIABILITIES	1,262,245	1,228,702	1,136,773
TEMPORARY EQUITY
Redeemable noncontrolling interest	7,563
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, 61,637,514, 61,901,851 and 61,887,770	61,638	61,902	61,888
Additional paid-in capital	284,025	243,995	239,563
Retained earnings	2,102,764	1,678,121	1,552,593
Accumulated other comprehensive loss	(11,348)	(5,405)	(3,278)
Total controlling interest shareholders' equity	2,437,079	1,978,613	1,850,766
Noncontrolling interest	31,660	37,956	26,708
TOTAL SHAREHOLDERS' EQUITY	2,468,739	2,016,569	1,877,474
TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS' EQUITY	$ 3,738,547	$ 3,245,271	$ 3,014,247

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 24, 2022	Dec. 25, 2021	Sep. 25, 2021
SHAREHOLDERS' EQUITY:
Preferred stock, no par value (in dollars per share)	$ 0	$ 0	$ 0
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0	0
Preferred stock, shares outstanding (in shares)	0	0	0
Common Stock, Par or Stated Value Per Share	$ 1	$ 1	$ 1
Common stock, shares authorized (in shares)	160,000,000	160,000,000	160,000,000
Common stock, shares issued (in shares)	61,637,514	61,901,851	61,887,770
Common stock, shares outstanding (in shares)	61,637,514	61,901,851	61,887,770

XML

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
NET SALES	$ 2,322,855	$ 2,093,784	$ 7,713,042	$ 6,619,329
COST OF GOODS SOLD	1,872,679	1,766,229	6,281,051	5,583,926
GROSS PROFIT	450,176	327,555	1,431,991	1,035,403
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	214,327	169,467	649,015	504,104
OTHER (GAINS) LOSS, NET	(1,195)	(10,037)	1,341	(11,248)
EARNINGS FROM OPERATIONS	237,044	168,125	781,635	542,547
INTEREST EXPENSE	3,516	3,433	10,213	10,483
INTEREST AND INVESTMENT LOSS (INCOME)	1,658	371	6,905	(3,614)
EQUITY IN EARNINGS OF INVESTEE	1,208	946	2,740	2,411
NON-OPERATING (INCOME)/EXPENSE	6,382	4,750	19,858	9,280
EARNINGS BEFORE INCOME TAXES	230,662	163,375	761,777	533,267
INCOME TAXES	58,561	37,628	188,692	127,909
NET EARNINGS	172,101	125,747	573,085	405,358
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST	(4,860)	(4,706)	(13,023)	(7,624)
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST	$ 167,241	$ 121,041	$ 560,062	$ 397,734
EARNINGS PER SHARE - BASIC (USD per share)	$ 2.68	$ 1.94	$ 8.93	$ 6.40
EARNINGS PER SHARE - DILUTED (USD per share)	$ 2.66	$ 1.94	$ 8.89	$ 6.38
OTHER COMPREHENSIVE INCOME:
NET EARNINGS	$ 172,101	$ 125,747	$ 573,085	$ 405,358
OTHER COMPREHENSIVE LOSS	(4,477)	(2,024)	(5,676)	(1,500)
COMPREHENSIVE INCOME	167,624	123,723	567,409	403,858
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST	(4,273)	(4,496)	(13,290)	(7,608)
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST	$ 163,351	$ 119,227	$ 554,119	$ 396,250

XML

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Earnings	Noncontrolling Interest	Total
Beginning balance at Dec. 26, 2020	$ 61,206	$ 218,224	$ 1,182,680	$ (1,794)	$ 22,836	$ 1,483,152
Increase (Decrease) in Stockholders' Equity
Net earnings			103,311		940	104,251
Foreign currency translation adjustment				(374)	(526)	(900)
Unrealized gain (loss) on debt securities				(1,296)		(1,296)
Distributions to noncontrolling interest					(2,914)	(2,914)
Cash dividends			(9,274)			(9,274)
Issuance of shares under employee stock purchase plan	6	357				363
Net issuance (forfeitures) of shares under stock grant programs	537	3,888	5			4,430
Issuance of 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
Ending balance at Mar. 27, 2021	61,838	231,111	1,276,722	(3,464)	20,336	1,586,543
Increase (Decrease) in Stockholders' Equity
Net earnings			173,382		1,978	175,360
Foreign currency translation adjustment				1,759	720	2,479
Unrealized gain (loss) on debt securities				241		241
Cash dividends			(9,276)			(9,276)
Issuance of shares under employee stock purchase plan	9	564				573
Net issuance (forfeitures) of shares under stock grant programs	(6)	(224)	5			(225)
Issuance of 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
Ending balance at Jun. 26, 2021	61,851	235,309	1,440,833	(1,464)	23,034	1,759,563
Increase (Decrease) in Stockholders' Equity
Net earnings			121,041		4,706	125,747
Foreign currency translation adjustment				(1,897)	(210)	(2,107)
Unrealized gain (loss) on debt securities				83		83
Redeemable noncontrolling interest					(822)	(822)
Cash dividends			(9,281)			(9,281)
Issuance of shares under employee stock purchase plan	10	573				583
Net issuance (forfeitures) of shares under stock grant programs	17	(115)				(98)
Issuance of shares under deferred compensation plans	10	(10)
Expense associated with share-based compensation arrangements		2,657				2,657
Accrued expense under deferred compensation plans		1,149				1,149
Ending balance at Sep. 25, 2021	61,888	239,563	1,552,593	(3,278)	26,708	1,877,474
Beginning balance at Dec. 25, 2021	61,902	243,995	1,678,121	(5,405)	37,956	2,016,569
Increase (Decrease) in Stockholders' Equity
Net earnings			189,703		3,428	193,131
Foreign currency translation adjustment				2,930	949	3,879
Unrealized gain (loss) on debt securities				(695)		(695)
Distributions to noncontrolling interest					(2,053)	(2,053)
Cash dividends			(12,541)			(12,541)
Issuance of shares under employee stock purchase plan	10	653				663
Net issuance (forfeitures) of shares under stock grant programs	787	8,959				9,746
Issuance of shares under deferred compensation plans	80	(80)
Repurchase of 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
Ending balance at Mar. 26, 2022	62,734	266,544	1,851,784	(3,170)	40,280	2,218,172
Increase (Decrease) in Stockholders' Equity
Net earnings			203,118		4,735	207,853
Foreign currency translation adjustment				(3,660)	(95)	(3,755)
Unrealized gain (loss) on debt securities				(628)		(628)
Cash dividends			(15,474)			(15,474)
Issuance of shares under employee stock purchase plan	14	781				795
Net issuance (forfeitures) of shares under stock grant programs	28	1,092				1,120
Issuance of shares under deferred compensation plans	12	(12)
Repurchase of 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
Ending balance at Jun. 25, 2022	61,623	275,061	1,950,922	(7,458)	44,920	2,325,068
Increase (Decrease) in Stockholders' Equity
Net earnings			167,241		4,380	171,621
Foreign currency translation adjustment				(3,330)	(29)	(3,359)
Unrealized gain (loss) on debt securities				(560)		(560)
Distributions to noncontrolling interest					(9,970)	(9,970)
Redeemable noncontrolling interest					(7,641)	(7,641)
Cash dividends			(15,405)			(15,405)
Issuance of shares under employee stock purchase plan	11	641				652
Net issuance (forfeitures) of shares under stock grant programs	(6)	(159)	6			(159)
Issuance of shares under deferred compensation plans	10	(10)
Expense associated with share-based compensation arrangements		7,407				7,407
Accrued expense under deferred compensation plans		1,085				1,085
Ending balance at Sep. 24, 2022	$ 61,638	$ 284,025	$ 2,102,764	$ (11,348)	$ 31,660	$ 2,468,739

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CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Temporary equity) - 3 months ended Sep. 24, 2022 $ in Thousands	USD ($)
Beginning balance at Jun. 25, 2022
Increase (Decrease) in Temporary Equity
Net earnings	480
Foreign currency translation adjustment	(558)
Redeemable noncontrolling interest	7,641
Ending balance at Sep. 24, 2022	$ 7,563

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CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Sep. 24, 2022	Jun. 25, 2022	Mar. 26, 2022	Sep. 25, 2021	Jun. 26, 2021	Mar. 27, 2021
Increase (Decrease) in Stockholders' Equity
Cash dividends per share (USD per share)	$ 0.25	$ 0.25	$ 0.20	$ 0.15	$ 0.15	$ 0.15
Net issuance of shares under employee stock plans (in shares)	10,678	13,875	9,734	10,008	9,282	5,816
Net issuance (forfeiture) of shares under stock grant programs (in shares)	6,396	28,154	787,045	17,165	5,718	536,970
Issuance of shares under deferred compensation plans (in shares)	10,705	11,605	79,973	9,864	8,913	89,690
Repurchase of shares (in shares)		1,165,268	44,442

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$ 573,085	$ 405,358
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation	68,881	61,741
Amortization of intangibles	13,448	9,369
Expense associated with share-based and grant compensation arrangements	19,979	8,444
Deferred income taxes (credit)	(269)	(594)
Unrealized loss (gain) on investments and other	8,453	(1,756)
Equity in loss of investee	2,740	2,411
Net loss (gain) on sale and disposition of assets	352	(10,482)
Changes in:
Accounts receivable	(137,607)	(141,088)
Inventories	(36,259)	(204,144)
Accounts payable and cash overdraft	(11,247)	53,437
Accrued liabilities and other	31,490	99,067
NET CASH FROM OPERATING ACTIVITIES	533,046	281,763
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(113,725)	(110,092)
Proceeds from sale of property, plant and equipment	2,303	26,597
Acquisitions and purchases of non-controlling interest, net of cash received	(105,212)	(433,275)
Purchases of investments	(16,925)	(17,866)
Proceeds from sale of investments	10,036	9,857
Other	911	(3,478)
NET CASH USED IN INVESTING ACTIVITIES	(222,612)	(528,257)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Borrowings under revolving credit facilities	570,700	886,966
Repayments under revolving credit facilities	(571,075)	(888,335)
Repayments of debt	(1,957)
Contingent consideration payments and other	(2,564)	(2,664)
Proceeds from issuance of common stock	2,110	1,519
Dividends paid to shareholders	(43,420)	(27,831)
Distributions to noncontrolling interest	(12,023)	(2,914)
Repurchase of common stock	(93,215)
Other	(210)	(334)
NET CASH USED IN FINANCING ACTIVITIES	(151,654)	(33,593)
Effect of exchange rate changes on cash	(139)	(292)
NET CHANGE IN CASH AND CASH EQUIVALENTS	158,641	(280,379)
Cash, cash equivalents, and restricted cash, beginning of period	291,223	436,608
Cash, cash equivalents, and restricted cash, end of period	$ 449,864	$ 156,229

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL (Parenthetical) - USD ($) $ in Thousands	Sep. 24, 2022	Dec. 25, 2021	Sep. 25, 2021
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Cash and cash equivalents, beginning of period	$ 286,662	$ 138,637	$ 436,507
Restricted cash, beginning of period	4,561	17,592	101
Cash, cash equivalents, and restricted cash, beginning of period	291,223	156,229	436,608
Cash and cash equivalents, end of period	449,135	286,662	138,637
Restricted cash, end of period	729	4,561	17,592
Cash, cash equivalents, and restricted cash, end of period	$ 449,864	$ 291,223	$ 156,229

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL AND NON-CASH FINANCING ACTIVITIES (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021
SUPPLEMENTAL INFORMATION:
Interest paid	$ 9,997	$ 10,360
Income taxes paid	213,117	136,893
NON-CASH INVESTING ACTIVITIES
Capital expenditures included in accounts payable	3,211	2,366
NON-CASH FINANCING ACTIVITIES:
Common stock issued under deferred compensation plans	$ 8,424	$ 6,778

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BASIS OF PRESENTATION

9 Months Ended

Sep. 24, 2022

BASIS OF PRESENTATION

BASIS OF PRESENTATION

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. All intercompany transactions and balances have been eliminated.

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

Seasonality has a significant impact on our working capital from March to August, which historically results in negative or modest cash flows from operations in our first and second quarters. Conversely, we experience a substantial decrease in working capital from September to February which typically results in significant cash flow from operations in our third and fourth quarters. For comparative purposes, we have included the September 25, 2021 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. 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.

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FAIR VALUE

9 Months Ended

Sep. 24, 2022

FAIR VALUE

FAIR VALUE

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):

	September 24, 2022								September 25, 2021
	Quoted		Prices with						Quoted		Prices with
	Prices in		Other			Prices with			Prices in		Other			Prices with
	Active		Observable			Unobservable			Active		Observable			Unobservable
	Markets		Inputs			Inputs			Markets		Inputs			Inputs
	(Level 1)		(Level 2)			(Level 3)	Total		(Level 1)		(Level 2)			(Level 3)	Total
Money market funds	$	19	$	4,825	$	—	$	4,844	$	19	$	2,631	$	—	$	2,650
Fixed income funds		2,584		16,321		—		18,905		962		17,021		—		17,983
Treasury securities		343		—		—		343		310		—		—		310
Equity securities		15,674		—		—		15,674		18,543		—		—		18,543
Alternative investments		—		—		4,136		4,136		—		—		3,536		3,536
Mutual funds:
Domestic stock funds		11,859		—		—		11,859		9,968		—		—		9,968
International stock funds		1,279		—		—		1,279		1,675		—		—		1,675
Target funds		8		—		—		8		23		—		—		23
Bond funds		132		—		—		132		146		—		—		146
Alternative funds		527		—		—		527		497		—		—		497
Total mutual funds		13,805		—		—		13,805		12,309		—		—		12,309
Total	$	32,425	$	21,146	$	4,136	$	57,707	$	32,143	$	19,652	$	3,536	$	55,331
Assets at fair value	$	32,425	$	21,146	$	4,136	$	57,707	$	32,143	$	19,652	$	3,536	$	55,331

From the assets measured at fair value as of September 24, 2022, listed in the table above, $33.2 million of mutual funds, equity securities, and alternative investments are held in Investments, $4.7 million of money market funds are held in Cash and Cash Equivalents, $0.5 million of money market and mutual funds are held in Other Assets for our deferred compensation plan, and $19.2 million of fixed income funds and $0.1 million of money market funds are 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 $52.4 million as of September 24, 2022, which has been included in the aforementioned table of total investments. This portfolio consists of domestic and international equity securities, alternative investments, and fixed income bonds.

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

	September 24, 2022						September 25, 2021
			Unrealized						Unrealized
	Cost		Gain (Loss)		Fair Value		Cost		Gain		Fair Value
Fixed Income	$	21,199	$	(2,294)	$	18,905	$	17,293	$	690	$	17,983
Treasury Securities		343		—		343		310		—		310
Equity		15,392		282		15,674		14,392		4,151		18,543
Mutual Funds		13,430		(128)		13,302		9,210		2,435		11,645
Alternative Investments		3,079		1,057		4,136		3,370		166		3,536
Total	$	53,443	$	(1,083)	$	52,360	$	44,575	$	7,442	$	52,017

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 unrealized loss of the portfolio was $1.1 million. Carrying amounts above are recorded in the investments and restricted investments line items within the balance sheet as of September 24, 2022 and September 25, 2021.

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REVENUE RECOGNITION

9 Months Ended

Sep. 24, 2022

REVENUE RECOGNITION

REVENUE RECOGNITION

C.       REVENUE RECOGNITION

Within the three primary segments (Retail, Industrial, and 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.

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

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

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

	Three Months Ended					Nine Months Ended
	September 24,		September 25,			September 24,		September 25,
	2022		2021		% Change	2022		2021		% Change
Point in Time Revenue	$	2,270,438	$	2,063,647	10.0%	$	7,571,128	$	6,530,204	15.9%
Over Time Revenue		52,417		30,137	73.9%		141,914		89,125	59.2%
Total Net Sales		2,322,855		2,093,784	10.9%	$	7,713,042	$	6,619,329	16.5%

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):

	September 24,		December 25,		September 25,
	2022		2021		2021
Cost and Earnings in Excess of Billings	$	8,477	$	5,602	$	3,776
Billings in Excess of Cost and Earnings		10,743		10,744		10,373

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EARNINGS PER SHARE

9 Months Ended

Sep. 24, 2022

EARNINGS PER SHARE

EARNINGS PER SHARE

D.       EARNINGS PER SHARE

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

	Three Months Ended				Nine Months Ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Numerator:
Net earnings attributable to controlling interest	$	167,241	$	121,041	$	560,062	$	397,734
Adjustment for earnings allocated to non-vested restricted common stock		(6,857)		(3,952)		(21,970)		(12,800)
Net earnings for calculating EPS	$	160,384	$	117,089	$	538,092	$	384,934
Denominator:
Weighted average shares outstanding		62,445		62,266		62,743		62,162
Adjustment for non-vested restricted common stock		(2,560)		(2,033)		(2,461)		(2,001)
Shares for calculating basic EPS		59,885		60,233		60,282		60,161
Effect of dilutive restricted common stock		307		168		255		137
Shares for calculating diluted EPS		60,192		60,401		60,537		60,298
Net earnings per share:
Basic	$	2.68	$	1.94	$	8.93	$	6.40
Diluted	$	2.66	$	1.94	$	8.89	$	6.38

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COMMITMENTS, CONTINGENCIES, AND GUARANTEES

9 Months Ended

Sep. 24, 2022

COMMITMENTS, CONTINGENCIES, AND GUARANTEES

COMMITMENTS, CONTINGENCIES, AND GUARANTEES

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 September 24, 2022, 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 September 24, 2022, we had outstanding purchase commitments on commenced capital projects of approximately $65.4 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. 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 September 24, 2022, we had approximately $22.7 million in outstanding payment and performance bonds for open projects. We had approximately $30.6 million in payment and performance bonds outstanding for completed projects which are still under warranty.

On September 24, 2022, we had outstanding letters of credit totaling $59.9 million, primarily related to certain insurance contracts and industrial development revenue bonds described further below.

In lieu of cash deposits, we provide irrevocable letters of credit in favor of our insurers to guarantee our performance under certain insurance contracts. As of September 24, 2022, we have irrevocable letters of credit outstanding totaling approximately $52.8 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 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 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 third quarter of 2022 which would require us to recognize a liability on our balance sheet.

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BUSINESS COMBINATIONS AND EQUITY METHOD INVESTMENTS

9 Months Ended

Sep. 24, 2022

BUSINESS COMBINATIONS AND EQUITY METHOD INVESTMENTS

BUSINESS COMBINATIONS AND EQUITY METHOD INVESTMENTS

F.       BUSINESS COMBINATIONS AND EQUITY METHOD INVESTMENTS

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

					Net
Company	Acquisition		Intangible		Tangible		Operating
Name	Date	Purchase Price	Assets		Assets		Segment
	June 27, 2022	$65,858 cash paid for equity method investment	$	32,048	$	33,810	Industrial
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.
	May 9, 2022	$15,398 cash paid for 100% asset purchase	$	4,821	$	10,577	Retail
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.
	December 27, 2021	$24,057 cash paid for 100% stock purchase, net of acquired cash	$	17,484	$	6,573	Retail
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	$10,831 cash paid for 70% stock purchase and noncontrolling interest, net of acquired cash	$	9,562	$	1,269	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.

					Net
Company	Acquisition		Intangible		Tangible		Operating
Name	Date	Purchase Price	Assets		Assets		Segment
	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).
	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.

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 September 2021 and not consolidated with other operations contributed approximately $93.3 million in net sales and $6.1 million in operating profits during the first nine months of 2022.

As a result of the investment in Dempsey on June 27, 2022, we own 50% of the issued equity of the Company, 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 September 24, 2022, the carrying value of our investment in Dempsey is $67.0 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.

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SEGMENT REPORTING

9 Months Ended

Sep. 24, 2022

SEGMENT REPORTING

SEGMENT REPORTING

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 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, and Construction segments. In the case of locations which 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 September 24, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	845,304	$	584,808	$	777,126	$	112,203	$	3,414	$	2,322,855
Intersegment net sales		87,362		19,778		31,352		102,927		(241,419)		—
Earnings from operations		28,932		77,298		110,384		13,705		6,725		237,044

	Three Months Ended September 25, 2021
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	696,201	$	573,234	$	722,872	$	98,689	$	2,788	$	2,093,784
Intersegment net sales		50,546		23,148		27,574		122,470		(223,738)		—
Earnings from operations		(26,153)		70,408		84,205		20,283		19,382		168,125

	Nine Months Ended September 24, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	2,959,976	$	1,872,510	$	2,538,973	$	332,186	$	9,397	$	7,713,042
Intersegment net sales		220,922		63,438		88,570		338,592		(711,522)		—
Earnings from operations		124,856		253,899		322,034		51,268		29,578		781,635

	Nine Months Ended September 25, 2021
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	2,714,440	$	1,633,289	$	2,021,106	$	243,736	$	6,758	$	6,619,329
Intersegment net sales		163,279		66,039		62,069		345,920		(637,307)		—
Earnings from operations		89,443		190,344		184,330		44,565		33,865		542,547

The following table presents goodwill by segment as of September 24, 2022, and December 25, 2021 (in thousands):

	Retail		Industrial		Construction		All Other		Corporate		Total
Balance as of December 25, 2021	$	73,376	$	128,541	$	89,000	$	24,121	$	—	$	315,038
2022 Acquisitions		11,958		—		—		—		—		11,958
2022 Purchase Accounting Adjustments		293		(5,830)		(1,074)		659		—		(5,952)
Foreign Exchange, Net		—		—		(215)		(1,646)		—		(1,861)
Balance as of September 24, 2022	$	85,627	$	122,711	$	87,711	$	23,134	$	—	$	319,183

The following table presents total assets by segment as of September 24, 2022, and December 25, 2021 (in thousands).

	Total Assets by Segment
	September 24,		December 25,
Segment Classification	2022		2021		% Change
Retail	$	975,733	$	844,189	15.6	%
Industrial		855,240		741,672	15.3
Construction		834,917		736,157	13.4
All Other		324,113		343,363	(5.6)
Corporate		748,544		579,890	29.1
Total Assets	$	3,738,547	$	3,245,271	15.2	%

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INCOME TAXES

9 Months Ended

Sep. 24, 2022

INCOME TAXES

INCOME TAXES

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 25.4% in the third quarter of 2022 compared to 23.0% in the third quarter of 2021 and was 24.8% in the first nine months of 2022 compared to 24.0% for the same period in 2021. The increase was primarily due to one-time tax credits recorded as discrete items in 2021 that are not available in 2022.

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COMMON STOCK

9 Months Ended

Sep. 24, 2022

COMMON STOCK

COMMON STOCK

I.       COMMON STOCK

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

	September 24, 2022
Share Issuance Activity	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	34	$	71.65
Shares issued under the employee stock gift program	2		78.60
Shares issued under the director retainer stock program	3		83.24
Shares issued under the bonus plan	755		82.73
Shares issued under the executive stock match plan	62		82.87
Forfeitures	(13)
Total shares issued under stock grant programs	809	$	82.73
Shares issued under the deferred compensation plans	102	$	82.36

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

	September 25, 2021
Share Issuance Activity	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	25	$	71.18
Shares issued under the employee stock gift program	2		76.80
Shares issued under the director retainer stock program	4		69.80
Shares issued under the bonus plan	487		57.06
Shares issued under the executive stock grants plan	77		60.24
Forfeitures	(21)
Total shares issued under stock grant programs	549	$	57.64
Shares issued under the deferred compensation plans	108	$	62.48

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

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INVENTORIES

9 Months Ended

Sep. 24, 2022

INVENTORIES

INVENTORIES

J.       INVENTORIES

Inventories are stated at the lower of cost or net realizable value. The cost of inventories includes raw materials, direct labor, and manufacturing overhead. Cost is determined on a weighted average FIFO basis. Raw materials consist primarily of unfinished wood products and other materials expected to be manufactured or treated prior to sale, while finished goods represent various manufactured and treated wood products ready for sale.

We write down the value of inventory, the impact of which is reflected in cost of goods sold in the Condensed Consolidated Statement of Earnings and Comprehensive Income, if the cost of specific inventory items on hand exceeds the amount we expect to realize from the ultimate sale or disposal of the inventory. These estimates are based on management's judgment regarding future demand and market conditions and analysis of historical experience. There was no lower of cost or net realizable value adjustment to inventory as of September 24, 2022 and the lower of cost or net realizable value adjustment to inventory as September 25, 2021 was $1.3 million.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 24, 2022

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

K.       SUBSEQUENT EVENTS

Subsequent to our reporting date, we repurchased approximately 32,000 shares for $2.2 million, at an average share price of $69.31.

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BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 24, 2022

BASIS OF PRESENTATION

Revenue Recognition

Within the three primary segments (Retail, Industrial, and 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.

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

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

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FAIR VALUE (Tables)

9 Months Ended

Sep. 24, 2022

FAIR VALUE

Assets measured at fair value

Assets measured at fair value are as follows (in thousands):

	September 24, 2022								September 25, 2021
	Quoted		Prices with						Quoted		Prices with
	Prices in		Other			Prices with			Prices in		Other			Prices with
	Active		Observable			Unobservable			Active		Observable			Unobservable
	Markets		Inputs			Inputs			Markets		Inputs			Inputs
	(Level 1)		(Level 2)			(Level 3)	Total		(Level 1)		(Level 2)			(Level 3)	Total
Money market funds	$	19	$	4,825	$	—	$	4,844	$	19	$	2,631	$	—	$	2,650
Fixed income funds		2,584		16,321		—		18,905		962		17,021		—		17,983
Treasury securities		343		—		—		343		310		—		—		310
Equity securities		15,674		—		—		15,674		18,543		—		—		18,543
Alternative investments		—		—		4,136		4,136		—		—		3,536		3,536
Mutual funds:
Domestic stock funds		11,859		—		—		11,859		9,968		—		—		9,968
International stock funds		1,279		—		—		1,279		1,675		—		—		1,675
Target funds		8		—		—		8		23		—		—		23
Bond funds		132		—		—		132		146		—		—		146
Alternative funds		527		—		—		527		497		—		—		497
Total mutual funds		13,805		—		—		13,805		12,309		—		—		12,309
Total	$	32,425	$	21,146	$	4,136	$	57,707	$	32,143	$	19,652	$	3,536	$	55,331
Assets at fair value	$	32,425	$	21,146	$	4,136	$	57,707	$	32,143	$	19,652	$	3,536	$	55,331

Available for sale investment portfolio

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

	September 24, 2022						September 25, 2021
			Unrealized						Unrealized
	Cost		Gain (Loss)		Fair Value		Cost		Gain		Fair Value
Fixed Income	$	21,199	$	(2,294)	$	18,905	$	17,293	$	690	$	17,983
Treasury Securities		343		—		343		310		—		310
Equity		15,392		282		15,674		14,392		4,151		18,543
Mutual Funds		13,430		(128)		13,302		9,210		2,435		11,645
Alternative Investments		3,079		1,057		4,136		3,370		166		3,536
Total	$	53,443	$	(1,083)	$	52,360	$	44,575	$	7,442	$	52,017

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REVENUE RECOGNITION (Tables)

9 Months Ended

Sep. 24, 2022

REVENUE RECOGNITION

Schedule of Disaggregation of revenue

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

	Three Months Ended					Nine Months Ended
	September 24,		September 25,			September 24,		September 25,
	2022		2021		% Change	2022		2021		% Change
Point in Time Revenue	$	2,270,438	$	2,063,647	10.0%	$	7,571,128	$	6,530,204	15.9%
Over Time Revenue		52,417		30,137	73.9%		141,914		89,125	59.2%
Total Net Sales		2,322,855		2,093,784	10.9%	$	7,713,042	$	6,619,329	16.5%

Schedule of percentage-of-completion balances

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):

	September 24,		December 25,		September 25,
	2022		2021		2021
Cost and Earnings in Excess of Billings	$	8,477	$	5,602	$	3,776
Billings in Excess of Cost and Earnings		10,743		10,744		10,373

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 24, 2022

EARNINGS PER SHARE

Schedule of Computation of earnings per share

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

	Three Months Ended				Nine Months Ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Numerator:
Net earnings attributable to controlling interest	$	167,241	$	121,041	$	560,062	$	397,734
Adjustment for earnings allocated to non-vested restricted common stock		(6,857)		(3,952)		(21,970)		(12,800)
Net earnings for calculating EPS	$	160,384	$	117,089	$	538,092	$	384,934
Denominator:
Weighted average shares outstanding		62,445		62,266		62,743		62,162
Adjustment for non-vested restricted common stock		(2,560)		(2,033)		(2,461)		(2,001)
Shares for calculating basic EPS		59,885		60,233		60,282		60,161
Effect of dilutive restricted common stock		307		168		255		137
Shares for calculating diluted EPS		60,192		60,401		60,537		60,298
Net earnings per share:
Basic	$	2.68	$	1.94	$	8.93	$	6.40
Diluted	$	2.66	$	1.94	$	8.89	$	6.38

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BUSINESS COMBINATIONS AND EQUITY METHOD INVESTMENTS (Tables)

9 Months Ended

Sep. 24, 2022

BUSINESS COMBINATIONS AND EQUITY METHOD INVESTMENTS

Acquisitions Accounted for Using Purchase Method

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

					Net
Company	Acquisition		Intangible		Tangible		Operating
Name	Date	Purchase Price	Assets		Assets		Segment
	June 27, 2022	$65,858 cash paid for equity method investment	$	32,048	$	33,810	Industrial
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.
	May 9, 2022	$15,398 cash paid for 100% asset purchase	$	4,821	$	10,577	Retail
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.
	December 27, 2021	$24,057 cash paid for 100% stock purchase, net of acquired cash	$	17,484	$	6,573	Retail
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	$10,831 cash paid for 70% stock purchase and noncontrolling interest, net of acquired cash	$	9,562	$	1,269	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.

					Net
Company	Acquisition		Intangible		Tangible		Operating
Name	Date	Purchase Price	Assets		Assets		Segment
	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).
	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.

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SEGMENT REPORTING (Tables)

9 Months Ended

Sep. 24, 2022

SEGMENT REPORTING

Segment Reporting

The tables below are presented in thousands:

	Three Months Ended September 24, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	845,304	$	584,808	$	777,126	$	112,203	$	3,414	$	2,322,855
Intersegment net sales		87,362		19,778		31,352		102,927		(241,419)		—
Earnings from operations		28,932		77,298		110,384		13,705		6,725		237,044

	Three Months Ended September 25, 2021
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	696,201	$	573,234	$	722,872	$	98,689	$	2,788	$	2,093,784
Intersegment net sales		50,546		23,148		27,574		122,470		(223,738)		—
Earnings from operations		(26,153)		70,408		84,205		20,283		19,382		168,125

	Nine Months Ended September 24, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	2,959,976	$	1,872,510	$	2,538,973	$	332,186	$	9,397	$	7,713,042
Intersegment net sales		220,922		63,438		88,570		338,592		(711,522)		—
Earnings from operations		124,856		253,899		322,034		51,268		29,578		781,635

	Nine Months Ended September 25, 2021
	Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	2,714,440	$	1,633,289	$	2,021,106	$	243,736	$	6,758	$	6,619,329
Intersegment net sales		163,279		66,039		62,069		345,920		(637,307)		—
Earnings from operations		89,443		190,344		184,330		44,565		33,865		542,547

Schedule of Goodwill by Segment

The following table presents goodwill by segment as of September 24, 2022, and December 25, 2021 (in thousands):

	Retail		Industrial		Construction		All Other		Corporate		Total
Balance as of December 25, 2021	$	73,376	$	128,541	$	89,000	$	24,121	$	—	$	315,038
2022 Acquisitions		11,958		—		—		—		—		11,958
2022 Purchase Accounting Adjustments		293		(5,830)		(1,074)		659		—		(5,952)
Foreign Exchange, Net		—		—		(215)		(1,646)		—		(1,861)
Balance as of September 24, 2022	$	85,627	$	122,711	$	87,711	$	23,134	$	—	$	319,183

Schedule of assets by segment

	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		11,958		—		—		—		—		11,958
2022 Purchase Accounting Adjustments		293		(5,830)		(1,074)		659		—		(5,952)
Foreign Exchange, Net		—		—		(215)		(1,646)		—		(1,861)
Balance as of September 24, 2022	$	85,627	$	122,711	$	87,711	$	23,134	$	—	$	319,183

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COMMON STOCK (Tables)

9 Months Ended

Sep. 24, 2022

COMMON STOCK

Schedule of common stock issuances

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

	September 24, 2022
Share Issuance Activity	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	34	$	71.65
Shares issued under the employee stock gift program	2		78.60
Shares issued under the director retainer stock program	3		83.24
Shares issued under the bonus plan	755		82.73
Shares issued under the executive stock match plan	62		82.87
Forfeitures	(13)
Total shares issued under stock grant programs	809	$	82.73
Shares issued under the deferred compensation plans	102	$	82.36

	September 25, 2021
Share Issuance Activity	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	25	$	71.18
Shares issued under the employee stock gift program	2		76.80
Shares issued under the director retainer stock program	4		69.80
Shares issued under the bonus plan	487		57.06
Shares issued under the executive stock grants plan	77		60.24
Forfeitures	(21)
Total shares issued under stock grant programs	549	$	57.64
Shares issued under the deferred compensation plans	108	$	62.48

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FAIR VALUE - Asset Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 24, 2022	Sep. 25, 2021
Money market funds | Cash and Cash Equivalents
Fair Value
Investments at fair value	$ 4,700
Money market funds | Restricted Investment
Fair Value
Investments at fair value	100
Fixed Income | Restricted Investment
Fair Value
Investments at fair value	19,200
Mutual funds, equity and alternative investments | Investments
Fair Value
Investments at fair value	33,200
Money market and mutual funds | Other Non current Assets
Fair Value
Investments at fair value	500
Ardellis Insurance Ltd.
Fair Value
Total Fair Value	52,360	$ 52,017
Estimate of Fair Value Measurement | Recurring
Fair Value
Investments at fair value	57,707	55,331
Assets at fair value	57,707	55,331
Estimate of Fair Value Measurement | Recurring | Money market funds
Fair Value
Investments at fair value	4,844	2,650
Estimate of Fair Value Measurement | Recurring | Fixed Income
Fair Value
Investments at fair value	18,905	17,983
Estimate of Fair Value Measurement | Recurring | Treasury securities
Fair Value
Investments at fair value	343	310
Estimate of Fair Value Measurement | Recurring | Equity
Fair Value
Investments at fair value	15,674	18,543
Estimate of Fair Value Measurement | Recurring | Alternative Investments
Fair Value
Investments at fair value	4,136	3,536
Estimate of Fair Value Measurement | Recurring | Mutual Fund
Fair Value
Investments at fair value	13,805	12,309
Estimate of Fair Value Measurement | Recurring | Domestic stock
Fair Value
Investments at fair value	11,859	9,968
Estimate of Fair Value Measurement | Recurring | International stock funds
Fair Value
Investments at fair value	1,279	1,675
Estimate of Fair Value Measurement | Recurring | Target funds
Fair Value
Investments at fair value	8	23
Estimate of Fair Value Measurement | Recurring | Bond funds
Fair Value
Investments at fair value	132	146
Estimate of Fair Value Measurement | Recurring | Alternative funds
Fair Value
Investments at fair value	527	497
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1)
Fair Value
Investments at fair value	32,425	32,143
Assets at fair value	32,425	32,143
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Money market funds
Fair Value
Investments at fair value	19	19
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Fixed Income
Fair Value
Investments at fair value	2,584	962
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Treasury securities
Fair Value
Investments at fair value	343	310
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Equity
Fair Value
Investments at fair value	15,674	18,543
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Mutual Fund
Fair Value
Investments at fair value	13,805	12,309
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Domestic stock
Fair Value
Investments at fair value	11,859	9,968
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | International stock funds
Fair Value
Investments at fair value	1,279	1,675
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Target funds
Fair Value
Investments at fair value	8	23
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Bond funds
Fair Value
Investments at fair value	132	146
Estimate of Fair Value Measurement | Recurring | Quoted Prices in Active Markets (Level 1) | Alternative funds
Fair Value
Investments at fair value	527	497
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2)
Fair Value
Investments at fair value	21,146	19,652
Assets at fair value	21,146	19,652
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2) | Money market funds
Fair Value
Investments at fair value	4,825	2,631
Estimate of Fair Value Measurement | Recurring | Prices with Other Observable Inputs (Level 2) | Fixed Income
Fair Value
Investments at fair value	16,321	17,021
Estimate of Fair Value Measurement | Recurring | Prices with Unobservable Inputs (Level 3)
Fair Value
Investments at fair value	4,136	3,536
Assets at fair value	4,136	3,536
Estimate of Fair Value Measurement | Recurring | Prices with Unobservable Inputs (Level 3) | Alternative Investments
Fair Value
Investments at fair value	$ 4,136	$ 3,536

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FAIR VALUE - Available for Sale Investment Portfolio (Details) - Ardellis Insurance Ltd. - USD ($) $ in Thousands	Sep. 24, 2022	Sep. 25, 2021
Available-for-sale securities
Total Securities Cost	$ 53,443	$ 44,575
Unrealized Gain (Loss)	(1,083)	7,442
Total Fair Value	52,360	52,017
Fixed Income
Available-for-sale securities
Debt Securities Cost	21,199	17,293
Debt Securities Unrealized Gain/(Loss)	(2,294)
Debt Securities Unrealized Gain/(Loss)		690
Debt Securities Fair Value	18,905	17,983
Treasury securities
Available-for-sale securities
Debt Securities Cost	343	310
Debt Securities Fair Value	343	310
Equity
Available-for-sale securities
Equity Securities Cost	15,392	14,392
Equity Securities Unrealized Gain/(Loss)	282	4,151
Equity Securities Fair Value	15,674	18,543
Mutual Fund
Available-for-sale securities
Debt Securities Cost	13,430	9,210
Debt Securities Unrealized Gain/(Loss)	(128)
Debt Securities Unrealized Gain/(Loss)		2,435
Debt Securities Fair Value	13,302	11,645
Alternative Investments
Available-for-sale securities
Debt Securities Cost	3,079	3,370
Debt Securities Unrealized Gain/(Loss)	1,057	166
Debt Securities Fair Value	$ 4,136	$ 3,536

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REVENUE RECOGNITION - Disaggregated revenue (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022 USD ($) item	Sep. 25, 2021 USD ($)	Sep. 24, 2022 USD ($) item	Sep. 25, 2021 USD ($)
Revenue Recognition.
Number of markets in which the entity operates (in markets) | item	3		3
NET SALES	$ 2,322,855	$ 2,093,784	$ 7,713,042	$ 6,619,329
Change %	10.90%		16.50%
Point in Time Revenue
Revenue Recognition.
NET SALES	$ 2,270,438	2,063,647	$ 7,571,128	6,530,204
Change %	10.00%		15.90%
Over Time Revenue
Revenue Recognition.
NET SALES	$ 52,417	$ 30,137	$ 141,914	$ 89,125
Change %	73.90%		59.20%
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-09-25 | Over Time Revenue
Revenue Recognition.
Number of months to complete contract projects	6 months		6 months
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-09-25 | Over Time Revenue
Revenue Recognition.
Number of months to complete contract projects	18 months		18 months

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REVENUE RECOGNITION - Percentage of completion (Details) - USD ($) $ in Thousands	Sep. 24, 2022	Dec. 25, 2021	Sep. 25, 2021
REVENUE RECOGNITION
Cost and Earnings in Excess of Billings	$ 8,477	$ 5,602	$ 3,776
Billings in Excess of Cost and Earnings	$ 10,743	$ 10,744	$ 10,373

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EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Numerator:
Net earnings attributable to controlling interest	$ 167,241	$ 121,041	$ 560,062	$ 397,734
Adjustment for earnings allocated to non-vested restricted common stock	(6,857)	(3,952)	(21,970)	(12,800)
Net earnings for calculating EPS	$ 160,384	$ 117,089	$ 538,092	$ 384,934
Denominator:
Weighted average shares outstanding (in shares)	62,445	62,266	62,743	62,162
Adjustment for non-vested restricted common stock (in shares)	(2,560)	(2,033)	(2,461)	(2,001)
Shares for calculating basic EPS (in shares)	59,885	60,233	60,282	60,161
Effect of dilutive restricted common stock (in shares)	307	168	255	137
Shares for calculating diluted EPS (in shares)	60,192	60,401	60,537	60,298
Net earnings per share
Basic (USD per share)	$ 2.68	$ 1.94	$ 8.93	$ 6.40
Diluted (USD per share)	$ 2.66	$ 1.94	$ 8.89	$ 6.38

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COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Details) $ in Millions	9 Months Ended
	Sep. 24, 2022 USD ($)
Long-term commitment
Outstanding purchase commitments on capital projects	$ 65.4
Surety Bonds and Letters of Credit
Outstanding letters of credit	59.9
Open Projects
Surety Bonds and Letters of Credit
Payment and performance bonds outstanding	22.7
Completed Projects
Surety Bonds and Letters of Credit
Payment and performance bonds outstanding	30.6
Insurance Contracts
Surety Bonds and Letters of Credit
Outstanding letters of credit	52.8
Revenue Bonds
Surety Bonds and Letters of Credit
Outstanding letters of credit	$ 7.1

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BUSINESS COMBINATIONS AND EQUITY METHOD INVESTMENTS (Details) $ in Thousands, $ in Millions									9 Months Ended
	Jun. 27, 2022 USD ($)	May 09, 2022 USD ($)	Dec. 27, 2021 USD ($)	Dec. 20, 2021 USD ($)	Nov. 22, 2021 USD ($) facility	Nov. 01, 2021 USD ($)	Nov. 01, 2021 AUD ($)	Sep. 27, 2021 USD ($) ft²	Sep. 24, 2022 USD ($)	Jul. 27, 2022 USD ($)
Business Acquisition
Aggregate acquisitions' net sales									$ 93,300
Aggregate acquisitions' operating profit									6,100
Dempsey Wood Products, LLC
Business Acquisition
Ownership interest										50.00%
Sellers | Dempsey Wood Products, LLC
Business Acquisition
Ownership interest										50.00%
Dempsey Wood Products, LLC
Business Acquisition
Sellers put right										$ 50,000
Call right										$ 70,000
Carrying value									$ 67,000
Dempsey Wood Products, LLC | Industrial
Business Acquisition
Purchase consideration, equity method investment	$ 65,858
Intangible Assets	32,048
Net Tangible Assets	33,810
Acquired equity method investment, prior year sales	$ 69,000
Cedar Poly, LLC | Retail
Business Acquisition
Cash paid for business acquisition		$ 15,398
Percentage of assets purchased (as a percent)		100.00%
Intangible Assets		$ 4,821
Net Tangible Assets		10,577
Acquired entity, prior year sales		$ 17,300
Ultra | Retail
Business Acquisition
Cash paid for business acquisition, net of cash acquired			$ 24,057
Percentage of stock purchase (as a percent)			100.00%
Intangible Assets			$ 17,484
Net Tangible Assets			6,573
Acquired entity, prior year sales			$ 45,000
Advantage | Industrial
Business Acquisition
Cash paid for business acquisition				$ 20,754
Percentage of stock purchase (as a percent)				100.00%
Intangible Assets				$ 11,417
Net Tangible Assets				9,337
Acquired entity, trailing 12-months sales				$ 19,800
Ficus | All Other
Business Acquisition
Cash paid for business acquisition, net of cash acquired					$ 10,831
Percentage of stock purchase (as a percent)					70.00%
Number of plant locations | facility					10
Intangible Assets					$ 9,562
Net Tangible Assets					1,269
Acquired entity, trailing 12-months sales					$ 39,000
Boxpack Packaging | All Other
Business Acquisition
Cash paid for business acquisition						$ 5,984
Percentage of assets purchased (as a percent)						100.00%
Intangible Assets						$ 5,681
Net Tangible Assets						303
Acquired entity, trailing 12-months sales						$ 6,200	$ 8.2
Shelter Products | Construction
Business Acquisition
Cash paid for business acquisition								$ 6,443
Percentage of assets purchased (as a percent)								100.00%
Intangible Assets								$ 4,039
Net Tangible Assets								2,404
Acquired entity, prior year sales								$ 11,400
Square feet of warehouse | ft²								87,800

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SEGMENT REPORTING (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Segment Reporting
Net sales	$ 2,322,855	$ 2,093,784	$ 7,713,042	$ 6,619,329
Earnings from operations	237,044	168,125	781,635	542,547
Intersegment net sales
Segment Reporting
Net sales	(241,419)	(223,738)	(711,522)	(637,307)
Corporate
Segment Reporting
Net sales	3,414	2,788	9,397	6,758
Earnings from operations	6,725	19,382	29,578	33,865
Retail
Segment Reporting
Net sales	845,304	696,201	2,959,976	2,714,440
Earnings from operations	28,932	(26,153)	124,856	89,443
Retail | Intersegment net sales
Segment Reporting
Net sales	87,362	50,546	220,922	163,279
Industrial
Segment Reporting
Net sales	584,808	573,234	1,872,510	1,633,289
Earnings from operations	77,298	70,408	253,899	190,344
Industrial | Intersegment net sales
Segment Reporting
Net sales	19,778	23,148	63,438	66,039
Construction
Segment Reporting
Net sales	777,126	722,872	2,538,973	2,021,106
Earnings from operations	110,384	84,205	322,034	184,330
Construction | Intersegment net sales
Segment Reporting
Net sales	31,352	27,574	88,570	62,069
All Other
Segment Reporting
Net sales	112,203	98,689	332,186	243,736
Earnings from operations	13,705	20,283	51,268	44,565
All Other | Intersegment net sales
Segment Reporting
Net sales	$ 102,927	$ 122,470	$ 338,592	$ 345,920

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SEGMENT REPORTING - Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 24, 2022 USD ($)
Goodwill
Goodwill, Beginning Balance	$ 315,038
Acquisitions	11,958
Purchase Accounting Adjustments	(5,952)
Foreign Exchange, Net	(1,861)
Goodwill, Ending Balance	319,183
Retail
Goodwill
Goodwill, Beginning Balance	73,376
Acquisitions	11,958
Purchase Accounting Adjustments	293
Goodwill, Ending Balance	85,627
Industrial
Goodwill
Goodwill, Beginning Balance	128,541
Purchase Accounting Adjustments	(5,830)
Goodwill, Ending Balance	122,711
Construction
Goodwill
Goodwill, Beginning Balance	89,000
Purchase Accounting Adjustments	(1,074)
Foreign Exchange, Net	(215)
Goodwill, Ending Balance	87,711
All Other
Goodwill
Goodwill, Beginning Balance	24,121
Purchase Accounting Adjustments	659
Foreign Exchange, Net	(1,646)
Goodwill, Ending Balance	$ 23,134

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SEGMENT REPORTING - Assets (Details) - USD ($) $ in Thousands	Sep. 24, 2022	Dec. 25, 2021	Sep. 25, 2021
Segment Reporting
Segment assets	$ 3,738,547	$ 3,245,271	$ 3,014,247
Change in assets (as a percent)	15.20%
Corporate
Segment Reporting
Segment assets	$ 748,544	579,890
Change in assets (as a percent)	29.10%
Retail
Segment Reporting
Segment assets	$ 975,733	844,189
Change in assets (as a percent)	15.60%
Industrial
Segment Reporting
Segment assets	$ 855,240	741,672
Change in assets (as a percent)	15.30%
Construction
Segment Reporting
Segment assets	$ 834,917	736,157
Change in assets (as a percent)	13.40%
All Other
Segment Reporting
Segment assets	$ 324,113	$ 343,363
Change in assets (as a percent)	(5.60%)

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INCOME TAXES (Details)	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
INCOME TAXES
Effective income tax rate	25.40%	23.00%	24.80%	24.00%

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COMMON STOCK - Common Stock Issuances (Details) - $ / shares	1 Months Ended	3 Months Ended		9 Months Ended
	Nov. 03, 2022	Jun. 25, 2022	Mar. 26, 2022	Sep. 24, 2022	Sep. 25, 2021
Common Stock
Repurchase of common stock (in shares)		1,165,268	44,442	1,210,000
Average Share Price
Repurchase of common stock (dollars per share)				$ 77.06
Stock Purchase Plan
Common Stock
Common stock issued				34,000	25,000
Average Share Price
Common stock issued (dollars per share)				$ 71.65	$ 71.18
Stock Gift Program
Common Stock
Common stock issued				2,000	2,000
Average Share Price
Common stock issued (dollars per share)				$ 78.60	$ 76.80
Stock Retainer Plan
Common Stock
Common stock issued				3,000	4,000
Average Share Price
Common stock issued (dollars per share)				$ 83.24	$ 69.80
LTSIP
Common Stock
Common stock issued				755,000	487,000
Average Share Price
Common stock issued (dollars per share)				$ 82.73	$ 57.06
Executive Stock Grants Plan
Common Stock
Common stock issued				62,000	77,000
Average Share Price
Common stock issued (dollars per share)				$ 82.87	$ 60.24
Deferred Compensation Plans
Common Stock
Common stock issued				102,000	108,000
Average Share Price
Common stock issued (dollars per share)				$ 82.36	$ 62.48
Subsequent Event
Common Stock
Repurchase of common stock (in shares)	32,000
Average Share Price
Repurchase of common stock (dollars per share)	$ 69.31
Stock grant programs
Common Stock
Common stock issued				809,000	549,000
Forfeitures				(13,000)	(21,000)
Average Share Price
Common stock issued (dollars per share)				$ 82.73	$ 57.64

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INVENTORIES (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021
INVENTORIES
Adjustments to inventory	$ 0.0	$ 1.3

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SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Nov. 03, 2022	Jun. 25, 2022	Mar. 26, 2022	Sep. 24, 2022
Subsequent Event
Repurchase of common stock (in shares)		1,165,268	44,442	1,210,000
Repurchase of common stock				$ 93,215
Repurchase of common stock (dollars per share)				$ 77.06
Subsequent Event
Subsequent Event
Repurchase of common stock (in shares)	32,000
Repurchase of common stock	$ 2,200
Repurchase of common stock (dollars per share)	$ 69.31