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 25, 2021~~March 26, 2022


☐	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 25, 2021~~March 26, 2022
	Common stock, $1 par value		~~61,887,770~~62,734,161


Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol	Name of Each Exchange On Which Registered
Common Stock, no par value	UFPI	The Nasdaq Stock Market, LLC

Table of Contents

UFP INDUSTRIES, INC.

TABLE OF CONTENTS

PART I.		FINANCIAL INFORMATION.	Page No.

	Item 1.	Financial Statements

		Condensed Consolidated Balance Sheets at ~~September~~March 26, 2022, December 25, 2021 ~~December 26, 2020~~ and ~~September 26, 2020~~March 27, 2021	3

		Condensed Consolidated Statements of Earnings and Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 25,~~March 26, 2022 and March 27, 2021 ~~and September 26, 2020~~	4

		Condensed Consolidated Statements of Shareholders’ Equity for the Three ~~and Nine~~ Months Ended ~~September 25,~~March 26, 2022 and March 27, 2021 ~~and September 26, 2020~~	5

		Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 25,~~March 26, 2022 and March 27, 2021 ~~and September 26, 2020~~	76

		Notes to Unaudited Condensed Consolidated Financial Statements	87

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1817

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3428

	Item 4.	Controls and Procedures	3429

PART II.		OTHER INFORMATION

	Item 1.	Legal Proceedings – NONE

	Item 1A.	Risk Factors - NONE	3529

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3529

	Item 3.	Defaults upon Senior Securities – NONE

	Item 4.	Mine Safety Disclosures – NONE

	Item 5.	Other Information – NONE	3530

	Item 6.	Exhibits	3530

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in thousands, except share data)
	September 25,		December 26,		September 26,		March 26,		December 25,		March 27,
	2021		2020		2020		2022		2021		2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	138,637	$	436,507	$	346,154	$	73,783	$	286,662	$	44,399
Restricted cash		17,592		101		724		729		4,561		629
Investments		33,723		24,308		20,530		35,465		36,495		31,439
Accounts receivable, net		783,959		470,504		583,079		1,095,362		737,805		808,105
Inventories:
Raw materials		368,185		316,481		286,418		576,023		416,043		438,762
Finished goods		532,480		250,813		242,316		654,328		547,277		384,652
Total inventories		900,665		567,294		528,734		1,230,351		963,320		823,414
Refundable income taxes		14,134		5,836		—		—		4,806		—
Other current assets		34,040		33,812		32,888		36,727		39,827		29,072
TOTAL CURRENT ASSETS		1,922,750		1,538,362		1,512,109		2,472,417		2,073,476		1,737,058
DEFERRED INCOME TAXES		2,330		2,413		2,070		3,590		3,462		2,290
RESTRICTED INVESTMENTS		18,925		17,565		17,327		19,390		19,310		17,209
RIGHT OF USE ASSETS		94,481		77,245		77,412		99,914		96,703		98,404
OTHER ASSETS		29,168		20,298		24,216		32,544		31,876		27,358
GOODWILL		292,318		252,193		245,925		317,631		315,038		314,189
INDEFINITE-LIVED INTANGIBLE ASSETS		7,380		7,401		7,361		7,396		7,369		7,401
OTHER INTANGIBLE ASSETS, NET		93,984		72,252		58,205		120,205		109,017		93,812
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment		1,156,070		974,497		935,639		1,244,070		1,212,113		1,060,893
Less accumulated depreciation and amortization		(603,159)		(557,335)		(529,644)		(643,191)		(623,093)		(572,526)
PROPERTY, PLANT AND EQUIPMENT, NET		552,911		417,162		405,995		600,879		589,020		488,367
TOTAL ASSETS		3,014,247		2,404,891		2,350,620		3,673,966		3,245,271		2,786,088
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Cash overdraft	$	10,812	$	—	$	—	$	61,711	$	17,030	$	47,140
Accounts payable		292,933		211,518		231,111		425,956		319,125		299,398
Accrued liabilities:
Compensation and benefits		249,242		166,478		171,472		189,509		289,196		137,208
Income taxes		—		—		3,024		54,682		—		25,565
Other		90,348		69,104		69,888		102,434		84,853		78,560
Current portion of lease liability		22,242		16,549		15,349		26,015		23,155		23,051
Current portion of long-term debt		93		100		2,760		42,895		42,683		109
TOTAL CURRENT LIABILITIES		665,670		463,749		493,604		903,202		776,042		611,031
LONG-TERM DEBT		310,119		311,607		311,267		379,015		277,567		426,310
LEASE LIABILITY		75,548		61,509		62,100		76,969		76,632		76,408
DEFERRED INCOME TAXES		39,198		25,266		22,478		61,278		60,964		34,940
OTHER LIABILITIES		46,238		59,608		47,367		35,330		37,497		50,856
TOTAL LIABILITIES		1,136,773		921,739		936,816		1,455,794		1,228,702		1,199,545
SHAREHOLDERS’ EQUITY:
Controlling interest shareholders’ equity:
Preferred stock, 0 par value; shares authorized 1,000,000; issued and outstanding, NaN	$	—	$	—	$	—	$	—	$	—	$	—
Common stock, $1 par value; shares authorized 80,000,000; issued and outstanding, 61,887,770, 61,205,780 and 61,186,636		61,888		61,206		61,187
Common stock, $1 par value; shares authorized 80,000,000; issued and outstanding, 62,734,161, 61,901,851 and 61,838,256								62,734		61,902		61,838
Additional paid-in capital		239,563		218,224		216,002		266,544		243,995		231,111
Retained earnings		1,552,593		1,182,680		1,127,375		1,851,784		1,678,121		1,276,722
Accumulated other comprehensive loss		(3,278)		(1,794)		(6,974)		(3,170)		(5,405)		(3,464)
Total controlling interest shareholders’ equity		1,850,766		1,460,316		1,397,590		2,177,892		1,978,613		1,566,207
Noncontrolling interest		26,708		22,836		16,214		40,280		37,956		20,336
TOTAL SHAREHOLDERS’ EQUITY		1,877,474		1,483,152		1,413,804		2,218,172		2,016,569		1,586,543
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	3,014,247	$	2,404,891	$	2,350,620	$	3,673,966	$	3,245,271	$	2,786,088

See notes to consolidated condensed financial statements.

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

AND COMPREHENSIVE INCOME

(Unaudited)


(in thousands, except per share data)
	Three Months Ended				Nine Months Ended				Three Months Ended
	September 25,		September 26,		September 25,		September 26,		March 26,		March 27,
	2021		2020		2021		2020		2022		2021
NET SALES	$	2,093,784	$	1,486,227	$	6,619,329	$	3,760,290	$	2,489,313	$	1,825,004
COST OF GOODS SOLD		1,766,229		1,245,153		5,583,926		3,147,049		2,010,950		1,538,450
GROSS PROFIT		327,555		241,074		1,035,403		613,241		478,363		286,554
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		169,467		134,649		504,104		357,770		220,150		150,098
OTHER GAINS, NET		(10,037)		(176)		(11,248)		(2,120)		(812)		(1,031)
EARNINGS FROM OPERATIONS		168,125		106,601		542,547		257,591		259,025		137,487
INTEREST EXPENSE		3,433		2,486		10,483		6,291		3,302		3,151
INTEREST AND INVESTMENT LOSS (INCOME)		371		(1,565)		(3,614)		(1,623)		1,093		(2,296)
EQUITY IN EARNINGS OF INVESTEE		946		—		2,411		—		515		630
		4,750		921		9,280		4,668		4,910		1,485
EARNINGS BEFORE INCOME TAXES		163,375		105,680		533,267		252,923		254,115		136,002
INCOME TAXES		37,628		26,819		127,909		63,798		60,984		31,751
NET EARNINGS		125,747		78,861		405,358		189,125		193,131		104,251
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST		(4,706)		(1,657)		(7,624)		(5,299)		(3,428)		(940)
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST	$	121,041	$	77,204	$	397,734	$	183,826	$	189,703	$	103,311

EARNINGS PER SHARE – BASIC	$	1.94	$	1.25	$	6.40	$	2.98	$	3.01	$	1.67
EARNINGS PER SHARE – DILUTED	$	1.94	$	1.25	$	6.38	$	2.98	$	3.00	$	1.67

OTHER COMPREHENSIVE INCOME:
NET EARNINGS		125,747		78,861		405,358		189,125		193,131		104,251
OTHER COMPREHENSIVE GAIN (LOSS)		(2,024)		1,687		(1,500)		(4,030)		3,184		(2,196)
COMPREHENSIVE INCOME		123,723		80,548		403,858		185,095		196,315		102,055
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		(4,496)		(1,922)		(7,608)		(3,354)		(4,377)		(414)
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST	$	119,227	$	78,626	$	396,250	$	181,741	$	191,938	$	101,641

See notes to consolidated condensed financial statements.

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


(in thousands, except share and per share data)
	Controlling Interest Shareholders’ Equity												Controlling Interest Shareholders’ Equity
							Accumulated												Accumulated
			Additional				Other								Additional				Other
	Common		Paid-In		Retained		Comprehensive		Noncontrolling				Common		Paid-In		Retained		Comprehensive		Noncontrolling
	Stock		Capital		Earnings		Earnings		Interest		Total		Stock		Capital		Earnings		Earnings		Interest		Total
Balance on December 26, 2020	$	61,206	$	218,224	$	1,182,680	$	(1,794)	$	22,836	$	1,483,152
Balance on December 25, 2021													$	61,902	$	243,995	$	1,678,121	$	(5,405)	$	37,956	$	2,016,569
Net earnings						103,311				940		104,251						189,703				3,428		193,131
Foreign currency translation adjustment								(374)		(526)		(900)								2,930		949		3,879
Unrealized loss on debt securities								(1,296)				(1,296)								(695)				(695)
Distributions to noncontrolling interest										(2,914)		(2,914)										(2,053)		(2,053)
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)								—
Additional purchase of noncontrolling interest																								—
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				2,936								2,936				6,883								6,883
Accrued expense under deferred compensation plans				5,795								5,795				6,134								6,134
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 plans		9		564								573
Net forfeitures of 5,718 shares under stock grant programs		(6)		(224)		5						(225)
Issuance of 8,913 shares under deferred compensation plans		10		(10)								—
Expense associated with share-based compensation arrangements				2,728								2,728
Accrued expense under deferred compensation plans				1,140								1,140
Balance on June 26, 2021	$	61,851	$	235,309	$	1,440,833	$	(1,464)	$	23,034	$	1,759,563
Net earnings						121,041				4,706		125,747
Foreign currency translation adjustment								(1,897)		(210)		(2,107)
Unrealized gain on debt securities								83				83
Distributions to noncontrolling interest												—
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 plans		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
Balance on March 26, 2022													$	62,734	$	266,544	$	1,851,784	$	(3,170)	$	40,280	$	2,218,172

~~Table of Contents~~

~~UFP INDUSTRIES, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY, CONTINUED~~

~~(Unaudited)~~


(in thousands, except share and per share data)
	Controlling Interest Shareholders’ Equity												Controlling Interest Shareholders’ Equity
							Accumulated												Accumulated
			Additional				Other								Additional				Other
	Common		Paid-In		Retained		Comprehensive		Noncontrolling				Common		Paid-In		Retained		Comprehensive		Noncontrolling
	Stock		Capital		Earnings		Earnings		Interest		Total		Stock		Capital		Earnings		Earnings		Interest		Total
Balance on December 28, 2019	$	61,409	$	192,173	$	995,022	$	(4,889)	$	14,018	$	1,257,733
Balance on December 26, 2020													$	61,206	$	218,224	$	1,182,680	$	(1,794)	$	22,836	$	1,483,152
Net earnings						40,159				411		40,570						103,311				940		104,251
Foreign currency translation adjustment								(5,951)		(2,335)		(8,286)								(374)		(526)		(900)
Unrealized loss on debt securities								(270)				(270)								(1,296)				(1,296)
Distributions to noncontrolling interest										(299)		(299)										(2,914)		(2,914)
Additional purchase of noncontrolling interest				130						(225)		(95)
Cash dividends - $0.125 per share - quarterly						(7,730)						(7,730)
Issuance of 10,549 shares under employee stock purchase plan		10		309								319
Net issuance of 350,124 shares under stock grant programs		350		12,454		1						12,805
Issuance of 89,616 shares under deferred compensation plans		89		(89)								—
Repurchase of 756,397 shares		(756)				(28,456)						(29,212)
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				1,404								1,404				2,936								2,936
Accrued expense under deferred compensation plans				5,343								5,343				5,795								5,795
Balance on March 28, 2020	$	61,102	$	211,724	$	998,996	$	(11,110)	$	11,570	$	1,272,282
Net earnings						66,463				3,231		69,694
Foreign currency translation adjustment								2,026		125		2,151
Unrealized gain on debt securities								688				688
Cash dividends - $0.125 per share - quarterly						(7,644)						(7,644)
Issuance of 9,714 shares under employee stock plans		10		367								377
Net issuance of 42,880 shares under stock grant programs		43		(174)		2						(129)
Issuance of 14,106 shares under deferred compensation plans		14		(14)								—
Expense associated with share-based compensation arrangements				824								824
Accrued expense under deferred compensation plans				1,082								1,082
Balance on June 27, 2020	$	61,169	$	213,809	$	1,057,817	$	(8,396)	$	14,926	$	1,339,325
Net earnings						77,204				1,657		78,861
Foreign currency translation adjustment								1,319		265		1,584
Unrealized loss on debt securities								103				103
Distributions to noncontrolling interest										(634)		(634)
Cash dividends - $0.125 per share - quarterly						(7,646)						(7,646)
Issuance of 7,511 shares under employee stock plans		7		338								345
Net forfeiture of 1,382 shares under stock grant programs		(1)		(56)								(57)
Issuance of 11,326 shares under deferred compensation plans		12		(12)								—
Expense associated with share-based compensation arrangements				826								826
Accrued expense under deferred compensation plans				1,097								1,097
Balance on September 26, 2020	$	61,187	$	216,002	$	1,127,375	$	(6,974)	$	16,214	$	1,413,804
Balance on March 27, 2021													$	61,838	$	231,111	$	1,276,722	$	(3,464)	$	20,336	$	1,586,543

See notes to consolidated condensed financial statements.

Table of Contents

UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(in thousands)	Nine Months Ended				Three Months Ended
	September 25,		September 26,		March 26,		March 27,
	2021		2020		2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	405,358	$	189,125	$	193,131	$	104,251
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation		61,741		47,226		21,842		18,733
Amortization of intangibles		9,369		5,863		4,672		3,998
Expense associated with share-based and grant compensation arrangements		8,444		3,152		6,931		2,981
Deferred income taxes		(594)		110		101		142
Unrealized gain on investments and other		(1,756)		(81)
Unrealized loss (gain) on investments and other						1,601		(1,754)
Equity in earnings of investee		2,411		—		515		630
Net gain on sale and disposition of assets		(10,482)		(662)		(306)		(532)
Changes in:
Accounts receivable		(141,088)		(211,238)		(352,928)		(253,323)
Inventories		(204,144)		(39,167)		(258,019)		(207,768)
Accounts payable and cash overdraft		53,437		85,354		143,895		121,892
Accrued liabilities and other		99,067		105,401		(6,466)		14,090
NET CASH PROVIDED BY OPERATING ACTIVITIES		281,763		185,083
NET CASH USED IN OPERATING ACTIVITIES						(245,031)		(196,660)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(110,092)		(67,024)		(32,072)		(34,656)
Proceeds from sale of property, plant and equipment		26,597		2,588		1,207		5,062
Acquisitions and purchases of non-controlling interest, net of cash received		(433,275)		(34,820)		(24,571)		(261,133)
Purchases of investments		(17,866)		(24,266)		(6,030)		(8,738)
Proceeds from sale of investments		9,857		22,281		4,725		3,381
Other		(3,478)		314		(2,995)		(414)
NET CASH USED IN INVESTING ACTIVITIES		(528,257)		(100,927)		(59,736)		(296,498)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		886,966		6,862		242,950		236,280
Repayments under revolving credit facilities		(888,335)		(6,498)		(141,438)		(121,570)
Repayments of debt						(199)		—
Contingent consideration payments and other		(2,664)		(3,087)		(551)		(627)
Issuance of long-term debt		—		150,000
Proceeds from issuance of common stock		1,519		1,042		663		363
Dividends paid to shareholders		(27,831)		(23,020)		(12,541)		(9,274)
Distributions to noncontrolling interest		(2,914)		(932)		(2,053)		(2,914)
Repurchase of common stock		—		(29,212)		(501)		—
Other		(334)		23		—		(331)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(33,593)		95,178
NET CASH PROVIDED BY FINANCING ACTIVITIES						86,330		101,927
Effect of exchange rate changes on cash		(292)		(1,122)		1,726		(349)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(280,379)		178,212		(216,711)		(391,580)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR		436,608		168,666		291,223		436,608
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	$	156,229	$	346,878	$	74,512	$	45,028

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Cash and cash equivalents, beginning of period	$	436,507	$	168,336	$	286,662	$	436,507
Restricted cash, beginning of period		101		330		4,561		101
Cash, cash equivalents, and restricted cash, beginning of period	$	436,608	$	168,666	$	291,223	$	436,608

Cash and cash equivalents, end of period	$	138,637	$	346,154	$	73,783	$	44,399
Restricted cash, end of period		17,592		724		729		629
Cash, cash equivalents, and restricted cash, end of period	$	156,229	$	346,878	$	74,512	$	45,028

SUPPLEMENTAL INFORMATION:
Interest paid	$	10,360	$	4,112	$	2,896	$	2,964
Income taxes paid		136,893		47,301		1,700		249
NON-CASH INVESTING ACTIVITIES
Capital expenditures included in accounts payable		2,366		—		2,512		—
NON-CASH FINANCING ACTIVITIES:
Common stock issued under deferred compensation plans		6,778		6,195		6,705		5,359

See notes to consolidated condensed financial statements.

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UFP INDUSTRIES, INC.

NOTES TO UNAUDITED

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A. BASIS OF PRESENTATION

The accompanying unaudited interim consolidated condensed financial statements (the “Financial Statements”) include our accounts and those of our wholly-owned and majority-owned subsidiaries and partnerships, and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the Financial Statements do not include all the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States. All intercompany transactions and balances have been eliminated. ~~Certain prior year amounts have been reclassified to conform to the current year presentation.~~

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 ~~26, 2020.~~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 26, 2020~~March 27, 2021 balances in the accompanying unaudited condensed consolidated balance sheets.

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~~UFP INDUSTRIES, INC.~~

B. FAIR VALUE

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


	September 25, 2021								September 26, 2020								March 26, 2022								March 27, 2021
	Quoted		Prices with						Quoted		Prices with						Quoted		Prices with						Quoted		Prices with
	Prices in		Other			Prices with			Prices in		Other			Prices with			Prices in		Other			Prices with			Prices in		Other			Prices with
	Active		Observable			Unobservable			Active		Observable			Unobservable			Active		Observable			Unobservable			Active		Observable			Unobservable
	Markets		Inputs			Inputs			Markets		Inputs			Inputs			Markets		Inputs			Inputs			Markets		Inputs			Inputs
	(Level 1)		(Level 2)			(Level 3)	Total		(Level 1)		(Level 2)			(Level 3)	Total		(Level 1)		(Level 2)			(Level 3)	Total		(Level 1)		(Level 2)			(Level 3)	Total
Money market funds	$	19	$	2,631	$	—	$	2,650	$	64	$	3,133	$	—	$	3,197	$	18	$	9,641	$	—	$	9,659	$	19	$	1,127	$	—	$	1,146
Fixed income funds		962		17,021		—		17,983		248		16,522		—		16,770		2,279		16,128		—		18,407		244		16,264		—		16,508
Treasury securities		310		—		—		310		—		—		—		—		342		—		—		342		—		—		—		—
Equity securities		18,543		—		—		18,543		10,524		—		—		10,524		19,289		—		—		19,289		18,496		—		—		18,496
Alternative investments		—		—		3,536		3,536		—		—		1,926		1,926		—		—		3,964		3,964		—		—		2,126		2,126
Mutual funds:
Domestic stock funds		9,968		—		—		9,968		6,826		—		—		6,826		10,576		—		—		10,576		9,388		—		—		9,388
International stock funds		1,675		—		—		1,675		1,243		—		—		1,243		1,621		—		—		1,621		1,395		—		—		1,395
Target funds		23		—		—		23		260		—		—		260		22		—		—		22		21		—		—		21
Bond funds		146		—		—		146		208		—		—		208		141		—		—		141		145		—		—		145
Alternative funds		497		—		—		497		433		—		—		433		501		—		—		501		496		—		—		496
Total mutual funds		12,309		—		—		12,309		8,970		—		—		8,970		12,861		—		—		12,861		11,445		—		—		11,445
Total	$	32,143	$	19,652	$	3,536	$	55,331	$	19,806	$	19,655	$	1,926	$	41,387	$	34,789	$	25,769	$	3,964	$	64,522	$	30,204	$	17,391	$	2,126	$	49,721
Assets at fair value	$	32,143	$	19,652	$	3,536	$	55,331	$	19,806	$	19,655	$	1,926	$	41,387	$	34,789	$	25,769	$	3,964	$	64,522	$	30,204	$	17,391	$	2,126	$	49,721

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UFP INDUSTRIES, INC.

From the assets measured at fair value as of ~~September 25, 2021,~~March 26, 2022, listed in the table above, ~~$33.6~~$35.4 million of mutual funds, equity securities, and alternative investments are held in Investments, ~~$0.1~~$9.0 million of money market funds are held in Cash and Cash Equivalents, $0.7 million of money market and mutual funds are held in Other Assets for our deferred compensation plan, and ~~$18.3~~$18.7 million of fixed income funds and ~~$2.6~~$0.7 million of money markets 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 ~~$52.0~~$54.2 million as of ~~September 25, 2021,~~March 26, 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 25, 2021						September 26, 2020						March 26, 2022						March 27, 2021
			Unrealized						Unrealized						Unrealized						Unrealized
	Cost		Gain		Fair Value		Cost		Gain		Fair Value		Cost		Gain		Fair Value		Cost		Gain		Fair Value
Fixed Income	$	17,293	$	690	$	17,983	$	15,750	$	1,020	$	16,770	$	19,049	$	(642)	$	18,407	$	15,867	$	642	$	16,509
Treasury Securities		310		—		310		—		—		—		342		—		342		—		—		—
Equity		14,392		4,151		18,543		9,121		1,403		10,524		15,347		3,942		19,289		14,664		3,832		18,496
Mutual Funds		9,210		2,435		11,645		7,228		852		8,080		9,392		2,820		12,212		8,769		2,049		10,818
Alternative Investments		3,370		166		3,536		1,881		45		1,926		3,028		936		3,964		1,929		197		2,126
Total	$	44,575	$	7,442	$	52,017	$	33,980	$	3,320	$	37,300	$	47,158	$	7,056	$	54,214	$	41,229	$	6,720	$	47,949

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 gain of the portfolio was ~~$7.4~~$7.1 million. Carrying amounts above are recorded in the investments and restricted investments line items within the balance sheet as of ~~September 25, 2021~~March 26, 2022 and ~~September 26, 2020.~~March 27, 2021.

C. REVENUE RECOGNITION

Within the 3 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 3^rdthird party. Installation revenue is recognized upon completion. If ~~the Company uses~~we use a 3^rdthird party for installation, the party will act as an agent to ~~the Company~~us until completion of the installation. Installation revenue represents an immaterial share of ~~the Company’s~~our total net sales.

~~The Company utilizes~~8

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UFP INDUSTRIES, INC.

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					Three Months Ended
	September 25,		September 26,			September 25,		September 26,			March 26,		March 27,
	2021		2020		% Change	2021		2020		% Change	2022		2021		% Change
FOB Shipping Point Revenue	$	2,063,647	$	1,454,220	41.9%	$	6,530,204	$	3,663,140	78.3%
Construction Contract Revenue		30,137		32,007	(5.8)%		89,125		97,150	(8.3)%
Point in Time Revenue											$	2,450,281	$	1,797,399	36.3%
Over Time Revenue												39,032		27,605	41.4%
Total Net Sales		2,093,784		1,486,227	40.9%	$	6,619,329	$	3,760,290	76.0%		2,489,313		1,825,004	36.4%

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 25,		December 26,		September 26,		March 26,		December 25,		March 27,
	2021		2020		2020		2022		2021		2021
Cost and Earnings in Excess of Billings	$	3,776	$	4,169	$	4,130	$	6,759	$	5,602	$	3,408
Billings in Excess of Cost and Earnings		10,373		11,530		11,264		12,634		10,744		9,396

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UFP INDUSTRIES, INC.

D. EARNINGS PER SHARE

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


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 25,		September 26,		September 25,		September 26,		March 26,		March 27,
	2021		2020		2021		2020		2022		2021
Numerator:
Net earnings attributable to controlling interest	$	121,041	$	77,204	$	397,734	$	183,826	$	189,703	$	103,311
Adjustment for earnings allocated to non-vested restricted common stock		(3,952)		(2,195)		(12,800)		(5,110)		(6,806)		(3,175)
Net earnings for calculating EPS	$	117,089	$	75,009	$	384,934	$	178,716	$	182,897	$	100,136
Denominator:
Weighted average shares outstanding		62,266		61,548		62,162		61,642		63,009		61,889
Adjustment for non-vested restricted common stock		(2,033)		(1,750)		(2,001)		(1,713)		(2,261)		(1,902)
Shares for calculating basic EPS		60,233		59,798		60,161		59,929		60,748		59,987
Effect of dilutive restricted common stock		168		20		137		19		225		28
Shares for calculating diluted EPS		60,401		59,818		60,298		59,948		60,973		60,015
Net earnings per share:
Basic	$	1.94	$	1.25	$	6.40	$	2.98	$	3.01	$	1.67
Diluted	$	1.94	$	1.25	$	6.38	$	2.98	$	3.00	$	1.67

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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 25, 2021,~~March 26, 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 25, 2021,~~March 26, 2022, we had outstanding purchase commitments on commenced capital projects of approximately ~~$44.1~~$68.7 million.

We provide a variety of warranties for products we manufacture. Historically, warranty claims have not been material. We also distribute products manufactured by other companies, some of which are no longer in business. 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 25, 2021,~~March 26, 2022, we had approximately ~~$39.6~~$30.0 million in outstanding payment and performance bonds for open projects. We had approximately ~~$2.1~~$11.1 million in payment and performance bonds outstanding for completed projects which are still under warranty.

On ~~September 25, 2021,~~March 26, 2022, we had outstanding letters of credit totaling ~~$52.6~~$51.7 million, primarily related to certain insurance contracts and industrial development revenue bonds described further below.

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UFP INDUSTRIES, INC.

In lieu of cash deposits, we provide irrevocable letters of credit in favor of our insurers to guarantee our performance under certain insurance contracts. As of ~~September 25, 2021,~~March 26, 2022, we have irrevocable letters of credit outstanding totaling approximately ~~$45.5~~$44.6 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~~first quarter of ~~2021~~2022 which would require us to recognize a liability on our balance sheet.

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UFP INDUSTRIES, INC.

F. BUSINESS COMBINATIONS

We completed the following acquisitions in ~~2021~~fiscal 2022 and since the end of ~~September 2020,~~March 2021, which were accounted for using the purchase ~~method~~method. Dollars below are in thousands unless otherwise noted:

Net

Company

Acquisition

Intangible

Tangible

Operating

Acquisition

Intangible

Tangible

Operating

Name

Date

Purchase Price

Assets

Segment

Date

Purchase Price

Assets

Segment

April 29, 2021

$10,108
cash paid for 100% asset purchase

7,099

3,009

Construction

December 27, 2021

$24,571
cash paid for 100% stock purchase, net of acquired cash

15,959

8,612

Retail

Endurable Building Products, LLC (Endurable)

Based near Minneapolis, Minnesota, Endurable is a leading manufacturer of customized structural aluminum systems and products for exterior purposes, such as deck framing, balconies, sunshades, railings and stairs. The company’s trademarked alumiLAST aluminum deck and balcony systems are known for their low-maintenance design and ease of installation. Endurable serves general contractors in the multifamily market throughout the U.S. and had sales of approximately $15 million in 2020.

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.

April 19, 2021

$8,549
cash paid for 100% asset purchase

1,526

7,023

Retail

December 20, 2021

$20,817
cash paid for 100% stock purchase

11,480

9,337

Industrial

Walnut Hollow Farm, Inc.

Walnut Hollow Farm, located in Wisconsin, is engaged in the business of designing, manufacturing, selling, and distributing wood products, tools, and accessories for the craft and hobby, outdoor sportsman art, personalized home décor, and hardware categories, with sales of approximately $11.6 million in 2020.

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.

April 12, 2021

$153,462
cash paid for 100% asset purchase

—

153,462

Retail

November 22, 2021

$11,155
cash paid for 70% stock purchase

9,106

2,049

Other

Spartanburg Forest Products, Inc.

Headquartered in Greer, South Carolina, Spartanburg Forest Products and its affiliates are a premier wood treating operation in the U.S., with approximately 150 employees and operations in 5 states. Its affiliates include Appalachian Forest Products, Innovative Design Industries, Blue Ridge Wood Preserving, Blue Ridge Wood Products, and Tidewater Wood Products and had combined sales of approximately $543.0 million in 2020.

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.

March 1, 2021

$4,724
cash paid for 100% asset purchase and estimated contingent consideration

4,264

460

Other

November 1, 2021

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

5,681

303

Other

J.C. Gilmore Pty Ltd (Gilmores)

Founded in 1988 and operating from its distribution facility in Port Melbourne, Australia, Gilmores is a leading distributor in the industrial and construction industries of packaging tapes, stretch films, packaging equipment, strapping, construction protection products and other items, with 2020 sales of $15 million AUD ($10 million USD).

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 $8.2 million AUD.

December 28, 2020

$259,011
cash paid for 100% stock purchase

66,899

192,112

Retail/Industrial

September 27, 2021

$6,443
cash paid for 100% asset purchase and estimated contingent consideration

4,039

2,404

Construction

PalletOne, Inc. (PalletOne)

Based in Bartow, Florida, PalletOne is a leading manufacturer of new pallets in the U.S., with 17 pallet manufacturing facilities in the southern and eastern regions of the country. The company also supplies other specialized industrial packaging, including custom bins and crates, and its Sunbelt Forest Products (Sunbelt) subsidiary operates 5 pressure-treating facilities in the Southeastern U.S. PalletOne and its affiliates had 2019 and 2020 sales of $525 million and $698 million, respectively.

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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UFP INDUSTRIES, INC.

Net

Company
Acquisition

Intangible
Tangible
Operating
Name
Date
Purchase Price
Assets
Assets
Segment

November 10, 2020
$21,268
cash paid for 100% asset purchase
$
11,923
$
9,345
Construction
Atlantic Prefab, Inc.; Exterior Designs, LLC; and Patriot Building Systems, LLC
Based in Wilton, New Hampshire, Atlantic Prefab produces prefabricated steel wall panels and light gauge metal trusses. The company’s steel component and prefinished wall panel lines are new, value-added product additions for UFP Construction that help shorten project timelines. Exterior Designs is a leading installer of siding and exterior cladding such as fiber cement, ACM (aluminum composite material) panels, phenolic panels, and EIFS (exterior insulation and finish systems). The company is based in Londonderry, New Hampshire, and serves commercial and multi-family clients throughout the Northeast. Also based in Londonderry, Patriot Building Systems provides commercial and multi-family framing services in the Northeast and will focus on markets not currently served by companies of UFP Industries. The companies had combined annual sales of approximately $28 million.

October 1, 2020
$5,936
cash paid for 100% asset purchase
$
5,222
$
714
Retail
Fire Retardant Chemical Technologies, LLC (FRCT)
Founded in 2014 and based in Matthews, North Carolina, FRCT’s business includes a research and development laboratory specializing in developing and testing a wide range of high-performance chemicals, including fire retardants and water repellants. The company had annual sales of approximately $6.4 million.

September 30, 2020
$3,475
cash paid for 50% stock purchase and estimated contingent consideration
$
7,267
$
(1,369)
Other
Enwrap Logistic & Packaging S.r.l. (Enwrap)
Enwrap is a newly formed company dedicated to the logistics and packaging business of its predecessor, Job Service S.p.A. Headquartered in Milan, Italy, Enwrap provides high-value, mixed material industrial packaging and logistics services through 8 locations in Italy. These locations generated annual sales of approximately $14 million.


					Net
Company	Acquisition		Intangible		Tangible		Operating
Name	Date	Purchase Price	Assets		Assets		Segment
	April 29, 2021	$10,129 cash paid for 100% asset purchase	$	7,099	$	3,030	Construction
Endurable Building Products, LLC (Endurable)	Based near Minneapolis, Minnesota, Endurable is a leading manufacturer of customized structural aluminum systems and products for exterior purposes, such as deck framing, balconies, sunshades, railings and stairs. The company’s trademarked alumiLAST aluminum deck and balcony systems are known for their low-maintenance design and ease of installation. Endurable serves general contractors in the multifamily market throughout the U.S. and had sales of approximately $15 million in 2020.
	April 19, 2021	$8,549 cash paid for 100% asset purchase	$	1,526	$	7,023	Retail
Walnut Hollow Farm, Inc.	Walnut Hollow Farm, located in Wisconsin, is engaged in the business of designing, manufacturing, selling, and distributing wood products, tools, and accessories for the craft and hobby, outdoor sportsman art, personalized home décor, and hardware categories, with sales of approximately $11.6 million in 2020.
	April 12, 2021	$153,462 cash paid for 100% asset purchase	$	—	$	153,462	Retail
Spartanburg Forest Products, Inc.	Headquartered in Greer, South Carolina, Spartanburg Forest Products and its affiliates are a premier wood treating operation in the U.S., with approximately 150 employees and operations in 5 states. Its affiliates include Appalachian Forest Products, Innovative Design Industries, Blue Ridge Wood Preserving, Blue Ridge Wood Products, and Tidewater Wood Products and had combined sales of approximately $543.0 million in 2020.

The intangible assets for the above acquisitions have not been finalized and allocated to their respective identifiable asset and goodwill accounts. In aggregate, acquisitions completed since the end of ~~September 2020~~March 2021 and not consolidated with other operations contributed approximately ~~$903.0~~$124.6 million in net sales and ~~$26.0~~$10.3 million in operating profits during the first ~~nine~~three months of ~~2021.~~2022.

G. SEGMENT REPORTING

~~The Company operates~~We operate manufacturing, treating and distribution facilities internationally, but primarily in the United States. ~~The~~Our business segments ~~align with the following markets:~~consist of UFP Retail Solutions, UFP Industrial and UFP Construction and ~~UFP Industrial. The~~align with the end markets we serve. This segment structure allows for a specialized and consistent sales approach among Company ~~manages~~operations, efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of ~~its~~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 ~~the Company’s~~our International segment, which comprises our Mexico, Canada, Europe, India, and Australia operations and sales and buying offices in other parts of the ~~world.~~

world and our Ardellis segment, which represents our wholly owned fully licensed captive insurance company based in Bermuda. Our International ~~segment~~ and Ardellis ~~(our insurance captive)~~segments do not meet the quantitative thresholds in order to be separately reported and accordingly, the International and Ardellis segments have been ~~included~~aggregated in the “All Other” ~~column of the table below.~~segment for reporting purposes.

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UFP INDUSTRIES, INC.

~~The “Corporate” column~~“Corporate” includes purchasing, transportation and administrative functions that serve our operating segments. Operating results of Corporate primarily ~~consists~~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 ~~leases~~operates transportation equipment, are also included in the Corporate column. ~~An inter-company~~Inter-company lease ~~charge is~~and service charges are assessed to our operating segments for the use of these assets and services at fair market value rates. Total assets ofin 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 ~~Transportation Ltd.~~RMS, LLC. The tables below are presented in thousands:


	Three Months Ended September 25, 2021												Three Months Ended March 26, 2022
	Retail		Industrial		Construction		All Other		Corporate		Total		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	$	993,232	$	611,369	$	786,471	$	95,567	$	2,674	$	2,489,313
Intersegment net sales		50,546		23,148		27,574		122,470		(223,738)		—		65,948		22,173		25,352		109,772		(223,245)		—
Segment operating profit		(26,153)		70,408		84,205		20,283		19,382		168,125		71,397		82,391		78,818		14,815		11,604		259,025

Three Months Ended September 26, 2020


Retail

Industrial

Construction

  All Other

  Corporate

      Total
Net sales to outside customers

$
700,522

$
282,124

$
447,103

$
56,700

$
(222)

$
1,486,227
Intersegment net sales

45,416

11,773

17,909

76,029

(151,127)

—
Segment operating profit

62,181

22,037

16,513

7,449

(1,579)

106,601

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)

—
Segment operating profit

89,443

190,344

184,330

44,565

33,865

542,547


	Nine Months Ended September 26, 2020												Three Months Ended March 27, 2021
	Retail		Industrial		Construction		All Other		Corporate		Total		Retail		Industrial		Construction		All Other		Corporate		Total
Net sales to outside customers	$	1,661,873	$	763,046	$	1,187,429	$	148,503	$	(561)	$	3,760,290	$	759,021	$	448,874	$	559,530	$	55,577	$	2,002	$	1,825,004
Intersegment net sales		109,378		32,788		49,685		196,908		(388,759)		—		47,586		17,906		14,461		97,396		(177,349)		—
Segment operating profit		122,082		53,837		50,544		20,573		10,555		257,591		53,545		40,410		33,018		7,978		2,536		137,487

The following table presents goodwill by segment as of ~~September~~March 26, 2022, and December 25, 2021 ~~and December 26, 2020~~ (in thousands):

Retail

Industrial

Construction

All Other

Corporate

Total
Balance as of December 26, 2020

$
61,943

$
87,827

$
90,729

$
11,694

$
—

$
252,193
2021 Acquisitions

18,441

43,844

2,427

4,176

—

68,888
2021 Purchase Accounting Adjustments

(1,682)

(17,937)

(6,227)

(2,575)

—

(28,421)
Foreign Exchange, Net

—

—

101

(443)

—

(342)
Balance as of September 25, 2021

$
78,702

$
113,734

$
87,030

$
12,852

$
—

$
292,318


	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		8,012		—		—		—		—		8,012
2022 Purchase Accounting Adjustments		293		(5,715)		(674)		99		—		(5,997)
Foreign Exchange, Net		—		—		156		422		—		578
Balance as of March 26, 2022	$	81,681	$	122,826	$	88,482	$	24,642	$	—	$	317,631

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~~UFP INDUSTRIES, INC.~~

The following table presents total assets by segment as of ~~September~~March 26, 2022, and December 25, 2021 ~~and December 26, 2020~~ (in thousands).


	Total Assets by Segment						Total Assets by Segment
	September 25,		December 26,				March 26,		December 26,
Segment Classification	2021		2020		% Change		2022		2021		% Change
Retail	$	829,745	$	510,464	62.5	%	$	1,205,382	$	844,189	42.8	%
Industrial		740,206		416,487	77.7			857,706		741,672	15.6
Construction		725,419		510,972	42.0			858,901		736,157	16.7
All Other		284,626		196,856	44.6			356,568		343,363	3.8
Corporate		434,251		770,112	(43.6)			395,409		579,890	(31.8)
Total Assets	$	3,014,247	$	2,404,891	25.3	%	$	3,673,966	$	3,245,271	13.2	%

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 ~~23.0%~~24.0% in the ~~third~~first quarter of ~~2021~~2022 compared to ~~25.4%~~23.3% for same period in ~~2020 and was 24.0% in the first nine months of 2021 compared to 25.2% for the same period in 2020.~~2021. The ~~decrease~~increase was primarily due to one-time tax credit refunds recorded as a ~~decrease~~discrete item in ~~permanent tax differences~~the first quarter of 2021 that are not available in ~~2021 compared to the prior year, none of which are individually significant.~~2022.

~~I. COMMON STOCK~~

~~Below is a summary of common stock issuances for the first nine months of 2021 and 2020 (in thousands, except average share price):~~

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 match 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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UFP INDUSTRIES, INC.

I. COMMON STOCK

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


	March 26, 2022
Share Issuance Activity	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	10	$	80.04

Shares issued under the employee stock gift program	1		84.85
Shares issued under the director retainer stock program	1		80.78
Shares issued under the bonus plan	725		79.61
Shares issued under the executive stock match plan	62		82.87
Forfeitures	(2)
Total shares issued under stock grant programs	787	$	79.87

Shares issued under the deferred compensation plans	80	$	83.84

September 26, 2020
Share Issuance Activity

Common Stock

Average Share Price
Shares issued under the employee stock purchase plan

28

$
44.14

Shares issued under the employee stock gift program

2

45.93
Shares issued under the director retainer stock program

46

24.80
Shares issued under the bonus plan

271

47.51
Shares issued under the executive stock match grants plan

79

47.60
Forfeitures

(7)

Total shares issued under stock grant programs

391

$
44.92

Shares issued under the deferred compensation plans

115

$
53.85


	March 27, 2021
Share Issuance Activity	Common Stock		Average Share Price
Shares issued under the employee stock purchase plan	6	$	73.28

Shares issued under the employee stock gift program	1		79.91
Shares issued under the director retainer stock program	2		56.80
Shares issued under the bonus plan	468		53.68
Shares issued under the executive stock grants plan	77		60.24
Forfeitures	(11)
Total shares issued under stock grant programs	537	$	54.63

Shares issued under the deferred compensation plans	89	$	59.75

During the first ~~nine~~three months of 2022, we repurchased approximately 44,442 shares of our common stock at an average share price of $79.74. In April 2022, we repurchased approximately 756,000 shares for $58.5 million, at an average share price of $77.40.

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

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UFP INDUSTRIES, INC.

~~During the first nine months of 2020, we repurchased approximately 756,000 shares of our common stock at an average share price of $38.62.~~

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.

~~The Company writes~~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 ~~the Company expects~~we expect to realize from the ultimate sale or disposal of the inventory. These estimates are based on management's judgment regarding future demand and market conditions and analysis of historical experience. ~~The~~There were 0 lower of cost or net realizable value ~~adjustment~~adjustments to inventory as of ~~September 25, 2021~~March 26, 2022 and ~~September 26, 2020 was $1.3 million and $0, respectively.~~March 27, 2021.

K. SUBSEQUENT EVENTS

~~On September 27, 2027,~~In April 2022, we ~~acquired the equity~~added $500 million of ~~Shelter Products, Inc.,~~borrowing capacity by entering into a shelf facility with multiple lenders to support future growth. No amounts have been drawn on this facility.

Additionally in April 2022, we repurchased approximately 756,000 shares for ~~$6.5 million. Based in Haleyville, Alabama, Shelter Products provides distribution and logistics support to factory-built manufacturers through 9 warehouses across the U.S.~~

~~On October 29, 2021, we acquired the assets~~$58.5 million, at an average share price of The Box Pack Trust, operating as Boxpack Packaging (Boxpack) for $5.2 million. Based near Melbourne, Australia, Boxpack specializes in flexographic and lithographic cardboard packaging, using the latest CAD design and finishing techniques.$77.40.

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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~~first quarter of ~~2021.~~2022.

OVERVIEW

Our results for the ~~third~~first quarter of ~~2021~~2022 include the following highlights:

●

Our net sales were up ~~41%~~36% compared to the ~~third~~first quarter of ~~2020,~~2021, which was comprised of a ~~28%~~26% increase in selling prices primarily due to the commodity lumber market (see Historical Lumber Prices below), a ~~16%~~7% increase in unit sales due to acquisitions completed since ~~September~~March of last year, and a 3% ~~decline~~increase in organic unit sales. Organic unit growth of ~~16%~~14% in our construction segment was offset by an organic unit decline of ~~19%~~2% in our retail segment ~~while~~and 4% in our industrial ~~units were flat.~~segment.

●

Our operating profits increased ~~$61.5~~$121.5 million, or ~~58%~~88%, compared to the ~~third~~first quarter of ~~2020.~~2021. This increase resulted from a variety of factors including ~~strong demand from our industrial and construction segments,~~improved leveraging of our fixed costs, ~~and increased sales of value-added and new products that have higher margins. These favorable factors more than offset~~ the impact ~~that falling~~of rising lumber prices ~~had~~ on the ~~gross profits~~selling prices of commodity-based products sold on a variable price ~~that are not purchased through a vendor managed inventory program, particularly~~formula, and growth of our ~~pressure-treated~~new and value-added products which have higher gross margins. In addition, our ability to effectively include lumber ~~products sold~~and other cost increases in the ~~retail segment.~~selling prices of our products as well as value-based selling practices has enabled us to maintain our profit per unit. Acquisitions contributed approximately ~~$2.6~~$10.3 million to our increase in operating profits. Excluding the impact of acquisitions, gross profits increased by $176 million and we estimate that value-added and commodity-based products contributed ~~$93~~$133 million and $43 million, respectively, to ~~our quarter over quarter~~this increase.

●

Our cash flows used by operations for the first three months of 2022 increased to $245 million compared to $197 million during the first three months of 2021, primarily due to an increased investment in net working capital of $148 million, offset by an increase in ~~gross profits, which~~net earnings and non-cash expenses of $100 million. The increase in our net working capital requirements during the first quarter of 2022 was ~~offset by a decrease~~due to higher lumber prices, growth in our business, and an increase in our days supply of ~~approximately $23 million in commodity-based products.~~inventory to ensure we meet the delivery expectations of our customers.

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UFP INDUSTRIES, INC.

●

Our cash flows provided by operations for the first nine months of 2021 was $282 million compared to $185 million during the first nine months of 2020 in spite of an increase in our net working capital, which increased $133 million compared to the prior year. The increase in our net working capital during 2021 is due to a combination of unusually high lumber prices and strong market demand in our industrial and construction segments. In addition, our investment in net working capital at the end of the third quarter of 2020 was unusually low due to unexpectedly strong demand in our retail segment and difficulty maintaining an adequate supply of inventory due to supply chain constraints. As lumber prices and demand in the retail segment began to normalize in the second and third quarters of 2021, our investment in net working capital has decreased, and we now have a cash surplus of $139 million. We anticipate our net working capital will continue to decrease for the balance of the year, assuming lumber prices remain at current levels, as the fourth quarter typically represents a seasonally slower quarter for most of our business units.

●

~~Our~~ net debt (debt and cash overdraft less cash) at the end of ~~September 2021~~March 2022 was ~~$182~~$410 million compared to ~~net cash of $32~~$429 million at the end of ~~September 2020.~~March 2021. Our unused borrowing capacity under revolving credit facilities and cash surplus resulted in total liquidity of approximately ~~$668~~$445.3 million at the end of the ~~third~~first quarter of ~~2021.~~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


2021

2020

January

$
890

$
377

February

954

402

March

1,035

420

April

1,080

358

May

1,428

394

June

1,344

455

July

690

530

August

443

716

September

412

934

Third quarter average

$
515

$
727

Year-to-date average

$
920

$
510

Third quarter percentage change

(29.2)
%

Year-to-date percentage change

80.4
%


	Random Lengths Composite
	Average $/MBF
	2022			2021
January	$	1,112		$	890
February		1,225			954
March		1,321			1,035

First quarter average	$	1,219		$	960
First quarter percentage change		27.0	%

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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.

Random Lengths SYP

Average $/MBF


2021

2020

January

$
858

$
346

February

903

345

March

938

360

April

922

333

May

1,150

412

June

1,052

494

July

564

552

August

448

729

September

438

886

Third quarter average

$
483

$
722

Year-to-date average

$
808

$
495

Third quarter percentage change

(33.1)
%

Year-to-date percentage change

63.2
%


	Southern Yellow Pine
	Average $/MBF
	2022			2021
January	$	1,010		$	858
February		1,115			903
March		1,198			938

First quarter average	$	1,108		$	900
First quarter percentage change		23.1	%

The sequential increase in overall lumber prices for the first ~~half~~quarter of the year was primarily due to strong market demand as well as certain constraints in the supply chain of lumber. Prices began to fall in June 2021 as pandemic related restrictions were lifted, the economy re-opened, and consumers shifted their spending to other areas. We believe prices in the third quarter of 2021 reflect normalized levels. A ~~decline~~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 ~~58.0%~~61.4% and ~~48.7%~~63.1% of our sales in the first ~~nine~~three months of ~~2021~~2022 and ~~2020,~~2021, respectively. The ~~increase~~decrease from the prior year ratio reflects ~~the impact~~an improvement in our sales mix of ~~higher lumber prices and the results of PalletOne’s subsidiaries, Sunbelt and Spartanburg Forest Products.~~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.

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UFP INDUSTRIES, INC.

●

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 second quarter, primarily due to pressure-treated lumber sold in our retail segment.

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

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

●

Products 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 ~~20%~~16% of our total annual sales in ~~2020.~~2021. 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. Our ~~annual purchases of inventory through these consignment programs totaled approximately 19% of our total lumber purchases in 2020. Our~~ new Sunbelt and Spartanburg Forest Products plants ~~operated with limited amounts of vendor~~began participating in these consignment ~~inventory and were more exposed to the impact of falling lumber prices during the second and third quarters of 2021. We anticipate increasing their use of these~~ programs in ~~future periods in a manner consistent~~2022, and we estimate that 24.2% of their inventory was consigned with ~~our ProWood pressure-treating operations.~~vendors. (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 ~~five~~one business ~~acquisitions~~acquisition during the first ~~nine~~three months of fiscal ~~2021~~2022 and ~~five~~nine during all of fiscal ~~2020.~~2021. The annual historical sales attributable to acquisitions completed in the first ~~nine~~three months of fiscal ~~2021~~2022 is approximately ~~$1.3 billion,~~$85 million, while acquisitions completed during the last ~~quarter~~nine months of ~~2020~~2021 have annual sales of approximately ~~$48~~$626 million. These business combinations were not significant to our quarterly results individually or in aggregate and thus pro forma results for ~~2021~~2022 and ~~2020~~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				Three Months Ended
	September 25,		September 26,		September 25,		September 26,		March 26,		March 27,
	2021		2020		2021		2020		2022		2021
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	84.4		83.8		84.4		83.7		80.8		84.3
Gross profit	15.6		16.2		15.6		16.3		19.2		15.7
Selling, general, and administrative expenses	8.1		9.1		7.6		9.5		8.8		8.2
Other gains, net	(0.5)		—		(0.2)		(0.1)
Other (gains) losses, net									—		(0.1)
Earnings from operations	8.0		7.2		8.2		6.9		10.4		7.6
Other expense, net	0.2		0.1		0.1		0.1		0.2		0.1
Earnings before income taxes	7.8		7.1		8.1		6.7		10.2		7.5
Income taxes	1.8		1.8		1.9		1.7		2.4		1.7
Net earnings	6.0		5.3		6.1		5.0		7.8		5.7
Less net earnings attributable to noncontrolling interest	(0.2)		(0.1)		(0.1)		(0.1)		(0.1)		(0.1)
Net earnings attributable to controlling interest	5.8	%	5.2	%	6.0	%	4.9	%	7.6	%	5.7	%

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								Percentage Change
	Three Months Ended				Nine Months Ended				Three Months Ended
	September 25,		September 26,		September 25,		September 26,		March 26,		March 27,
	2021		2020		2021		2020		2022		2021
Units sold	13.0	%	8.0	%	30.0	%	3.0	%	10.0	%	33.0	%
Gross profit	35.9		28.7		68.8		16.1		66.9		71.3
Selling, general, and administrative expenses	25.9		16.1		40.9		7.1		46.7		37.3
Earnings from operations	57.7		51.3		110.6		33.4		88.4		134.5

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UFP INDUSTRIES, INC.

The following table presents, for the periods indicated, our selling, general, and administrative (SG&A) costs as a percentage of gross profit. Given our strategies to enhance our capabilities and improve our value-added product offering, and recognizing the higher relative level of SG&A costs 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				Three Months Ended
		September 25,		September 26,		September 25,		September 26,		March 26,		March 27,
		2021		2020		2021		2020		2022		2021
Gross profit	$	327,555	$	241,074	$	1,035,403	$	613,241	$	478,363	$	286,554
Selling, general, and administrative expenses	$	169,467	$	134,649	$	504,104	$	357,770	$	220,150	$	150,098
SG&A as percentage of gross profit		51.7%		55.9%		48.7%		58.3%		46.0%		52.4%

Operating Results by Segment:

Our business segments ~~align with the following markets:~~consist of UFP Retail Solutions, UFP Industrial and UFP Construction, and ~~UFP Industrial. The~~align with the end markets we serve. Among other things, this structure allows for a more specialized and consistent sales approach among Company ~~manages~~operations, more efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of ~~its~~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,~~Retail, Industrial, and ~~construction~~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 ~~the Company’s~~our International segment, which comprises our Mexico, Canada, ~~Australia,~~Europe, Asia, and ~~Italy~~Australia operations and sales and ~~purchasing~~buying offices in other parts of the world. Our International segment and Ardellis (our insurance captive) ~~have been~~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~~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 ~~leases~~operates transportation equipment, are also included in the ~~corporate~~Corporate column. ~~An inter-company~~Inter-company lease ~~charge is~~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 25, 2021												Three Months Ended March 26, 2022

	Retail		Industrial		Construction		All Other		Corporate		Total		Retail		Industrial		Construction		All Other		Corporate		Total
Net sales	$	696,201	$	573,234	$	722,872	$	98,689	$	2,788	$	2,093,784	$	993,232	$	611,369	$	786,471	$	95,567	$	2,674	$	2,489,313
Cost of goods sold		685,369		446,822		568,809		63,082		2,147		1,766,229		858,895		461,815		625,059		64,024		1,157		2,010,950
Gross profit		10,832		126,412		154,063		35,607		641		327,555		134,337		149,554		161,412		31,543		1,517		478,363
Selling, general, administrative expenses		36,899		55,723		70,663		15,996		(9,814)		169,467		62,668		67,231		82,337		16,625		(8,711)		220,150
Other		86		281		(805)		(672)		(8,927)		(10,037)		272		(68)		257		103		(1,376)		(812)
Earnings from operations	$	(26,153)	$	70,408	$	84,205	$	20,283	$	19,382	$	168,125	$	71,397	$	82,391	$	78,818	$	14,815	$	11,604	$	259,025

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UFP INDUSTRIES, INC.

																					��
	Three Months Ended September 26, 2020												Three Months Ended March 27, 2021

	Retail		Industrial		Construction		All Other		Corporate		Total		Retail		Industrial		Construction		All Other			Corporate		Total
Net sales	$	700,522	$	282,124	$	447,103	$	56,700	$	(222)	$	1,486,227	$	759,021	$	448,874	$	559,530	$	55,577		$	2,002	$	1,825,004
Cost of goods sold		594,896		233,971		385,028		38,543		(7,285)		1,245,153		658,548		368,549		470,846		38,026			2,481		1,538,450
Gross profit		105,626		48,153		62,075		18,157		7,063		241,074		100,473		80,325		88,684		17,551			(479)		286,554
Selling, general, administrative expenses		43,515		26,080		45,411		10,499		9,144		134,649		47,100		40,113		55,545		10,421			(3,081)		150,098
Other		(70)		36		151		209		(502)		(176)		(172)		(198)		121		(848)			66		(1,031)
Earnings from operations	$	62,181	$	22,037	$	16,513	$	7,449	$	(1,579)	$	106,601	$	53,545	$	40,410	$	33,018	$	7,978		$	2,536	$	137,487

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

Nine Months Ended September 26, 2020

Retail

Industrial

Construction

All Other

Corporate

Total
Net sales

$
1,661,873

$
763,046

$
1,187,429

$
148,503

$
(561)

$
3,760,290
Cost of goods sold

1,429,229

635,424

1,002,932

101,240

(21,776)

3,147,049
Gross profit

232,644

127,622

184,497

47,263

21,215

613,241
Selling, general, administrative expenses

110,596

73,662

134,098

28,228

11,186

357,770
Other

(34)

123

(145)

(1,538)

(526)

(2,120)
Earnings from operations

$
122,082

$
53,837

$
50,544

$
20,573

$
10,555

$
257,591

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


	Three Months Ended September 25, 2021											Three Months Ended March 26, 2022

	Retail		Industrial		Construction		All Other		Corporate	Total		Retail		Industrial		Construction		All Other		Corporate	Total
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	N/A	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	N/A	100.0	%
Cost of goods sold	98.4		77.9		78.7		63.9		—	84.4		86.5		75.5		79.5		67.0		—	80.8
Gross profit	1.6		22.1		21.3		36.1		—	15.6		13.5		24.5		20.5		33.0		—	19.2
Selling, general, administrative expenses	5.3		9.7		9.8		16.2		—	8.1		6.3		11.0		10.5		17.4		—	8.8
Other	—		—		(0.1)		(0.7)		—	(0.5)		—		—		—		0.1		—	—
Earnings from operations	(3.8)	%	12.3	%	11.6	%	20.6	%	—	8.0	%	7.2	%	13.5	%	10.0	%	15.5	%	—	10.4	%

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


	Three Months Ended March 27, 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	86.8		82.1		84.2		68.4		—	84.3
Gross profit	13.2		17.9		15.8		31.6		—	15.7
Selling, general, administrative expenses	6.2		8.9		9.9		18.8		—	8.2
Other	—		—		—		(1.5)		—	—
Earnings from operations	7.1	%	9.0	%	5.9	%	14.4	%	—	7.5	%

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

~~Table of Contents~~

~~UFP INDUSTRIES, INC.~~

Three Months Ended September 26, 2020









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

84.9

82.9

86.1

68.0

—

83.8

Gross profit

15.1

17.1

13.9

32.0

—

16.2

Selling, general, administrative expenses

6.2

9.2

10.2

18.5

—

9.1

Other

—

—

—

0.4

—

—

Earnings from operations

8.9
%
7.8
%
3.7
%
13.1
%
—

7.2
%

~~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.~~

Nine Months Ended September 26, 2020









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

86.0

83.3

84.5

68.2

—

83.7

Gross profit

14.0

16.7

15.5

31.8

—

16.3

Selling, general, administrative expenses

6.7

9.7

11.3

19.0

—

9.5

Other

—

—

—

(1.0)

—

(0.1)

Earnings from operations

7.3
%
7.1
%
4.3
%
13.9
%
—

6.9
%

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

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UFP INDUSTRIES, INC.

NET SALES

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

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


	% Change										% Change
	in Sales		in Selling Prices		in Units		Acquisition Unit Change		Organic Unit Change		in Sales		in Selling Prices		in Units		Acquisition Unit Change		Organic Unit Change
Third quarter 2021 versus Third quarter 2020	40.9	%	27.9	%	13.0	%	16.0	%	(3.0)	%
Year-to-date 2021 versus Year-to-date 2020	76.0	%	46.0	%	30.0	%	25.0	%	5.0	%

First quarter 2022 versus First quarter 2021											36.4	%	26.4	%	10.0	%	6.8	%	3.2	%

●

Diversifying our end market sales mix by increasing sales of ~~specialty~~structural wood and protective packaging to industrial users, increasing our penetration of the concrete forming market, increasing our sales of engineered wood components for custom home, multi-family, military and light commercial construction, and increasing our market share with independent ~~retailers, and increasing our sales of customized interior fixtures, casework and millwork used in a variety of commercial markets.~~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, ~~specialty~~structural wood packaging, engineered wood components, customized interior fixtures, manufactured and assembled concrete forms, and "wood alternative" products. Engineered wood components include roof trusses, wall panels, and floor systems. Wood alternative products consist 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 (retail, industrial, construction, all other and corporate).

Three Months Ended September 25, 2021

Three Months Ended September 26, 2020


Value-Added

Commodity-Based

Value-Added

Commodity-Based

Retail

48.6
%

51.4
%

49.7
%

50.3
%

Industrial

69.2
%

30.8
%

63.7
%

36.3
%

Construction

74.5
%

25.5
%

74.3
%

25.7
%

All Other and Corporate

70.7
%

29.3
%

74.1
%

25.9
%

Total Sales

64.1
%

35.9
%

60.5
%

39.5
%

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 March 26, 2022				Three Months Ended March 27, 2021
	Value-Added		Commodity-Based		Value-Added		Commodity-Based
Retail	40.8	%	59.2	%	44.5	%	55.5	%
Industrial	67.8	%	32.2	%	66.9	%	33.1	%
Construction	72.4	%	27.6	%	68.9	%	31.1	%
All Other and Corporate	72.4	%	27.6	%	71.3	%	28.7	%
Total Sales	58.4	%	41.6	%	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.

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UFP INDUSTRIES, INC.

Nine Months Ended September 25, 2021

Nine Months Ended September 26, 2020


Value-Added

Commodity-Based

Value-Added

Commodity-Based

Retail

43.3
%

56.7
%

54.4
%

45.6
%

Industrial

66.6
%

33.4
%

65.5
%

34.5
%

Construction

70.5
%

29.5
%

77.4
%

22.6
%

All Other and Corporate

71.6
%

28.4
%

75.0
%

25.0
%

Total Sales

58.2
%

41.8
%

64.6
%

35.4
%

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.

The increase in our ratio of commodity-based product sales to total sales ~~during~~in the ~~first nine months of 2021~~retail segment reflected in the table above is primarily due to the impact of ~~dramatically~~ higher lumber prices in the first ~~half~~quarter of ~~2021, which have normalized during the third quarter. This is due to the fact that~~2022 as the selling prices of these products are generally indexed to the current Lumber Market at the time they are shipped and lumber costs comprise a much higher percentage of the selling price than they do for value-added products. The acquisition of ~~Sunbelt and~~ Spartanburg also contributed to the increase in commodity-based sales of treated lumber in our retail ~~segment, while PalletOne contributed to the increase in value-added sales in the industrial~~ segment. Our overall unit sales of value-added products increased approximately ~~17%~~6% in the ~~third~~first quarter of ~~2021~~2022 compared to ~~2020,~~2021, including a ~~15%~~3% contribution from acquisitions and 2%3% organic growth. Our unit sales of commodity-based products increased approximately 7%15%, including a ~~19%~~12% contribution from acquisitions and an3% organic ~~unit decline of 12%.~~growth.

~~Table of Contents~~

~~UFP INDUSTRIES, INC.~~

●

Developing new products. We define new products as those that will generate sales of at least a $1 million per year within 4 years of launch and are still growing and gaining market penetration. New product sales in the ~~third~~first quarter of ~~2021~~2022 increased ~~24%~~58%. Approximately ~~$10~~$80 million of new product sales for the first ~~nine~~three months of ~~2020,~~2021, while still sold, were sunset in ~~2021~~2022 and excluded from the table below because they no longer meet the definition above. Our goal is to achieve annual new product sales of at least ~~$575~~$525 million in ~~2021, which we have already attained. The table below presents new product sales in thousands:~~2022.

New Product Sales by Segment

New Product Sales by Segment

Three Months Ended

Nine Months Ended


September 25,

September 26,

%

September 25,

September 26,

%

2021

2020

Change

2021

2020

Change
Retail

$
111,795

118,731

(5.8)
%

$
375,798

$
301,602

24.6
%
Industrial

41,436

21,468

93.0
%

115,542

51,582

124.0
%
Construction

37,524

16,229

131.2
%

95,414

42,038

127.0
%
All Other and Corporate

5,998

2,495

140.4
%

13,419

8,082

66.0
%
Total New Product Sales

196,753

158,923

23.8
%

600,173

403,304

48.8
%

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.

The table below presents new product sales in thousands:


	New Product Sales by Segment
	Three Months Ended
	March 26,		March 27,		%
	2022		2021		Change
Retail	$	65,765		51,902	26.7	%
Industrial		48,705		27,200	79.1	%
Construction		35,662		15,794	125.8	%
All Other and Corporate		770		313	146.0	%
Total New Product Sales		150,902		95,209	58.5	%

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~~first quarter of ~~2021 decreased~~2022 increased by 1%31% compared to the same period of ~~2020,~~2021, due to a 19% increase in selling prices, acquisition unit growth of ~~18%~~12%, ~~which was offset by~~a 3% decrease due to the transfer of certain sales to the Construction segment, and an organic unit ~~decline~~increase of ~~19%~~1%. The price variance for this period was flat as the impact of lower prices on commodity-based products was offset by higher prices on value-added products which are generally sold at a fixed price. OrganicWe experienced organic unit ~~decreases of 29%~~growth in our ~~Handprint Home & Décor products, 28% in our ProWood pressure-treated products, 14% in our Deckorators composite decking~~UFP Edge (7%) and ~~railing products, and 8% in our Outdoor Essentials Fence, Lawn & Garden products~~Retail Building Products (4%) business units. These increases were offset by organic unit ~~growth of 12%~~decreases in our Sunbelt (3%), ProWood (2%), Deckorators (7%), Handprint (21%), and Outdoor Essentials (2%) business units. Our Deckorators business unit includes a variety of other products besides composite decking. Sales of accessories, such as plastic lattice, post caps, and balusters, reported a decline of 13%, while our composite decking unit sales increased by 5%. Capacity expansion contributed to our unit increases in Deckorators decking and UFP Edge, ~~siding, pattern,~~ and ~~trim products. The decline~~we believe the investments we’ve made in ~~our unit sales is primarily due to a shift in consumer spending as a result of the end of pandemic-related restrictions on certain activities. The increase in unit~~these business units will add planned sales of ~~UFP Edge was largely due to investments made to increase our capacity to produce these products as well as market share gains. Lastly, approximately $13~~nearly $100 million ~~of sales to customers that distribute products for concrete forming were transferred from the construction segment~~ to the ~~retail segment. Sales~~Retail segment in 2022. Finally, sales to big box customers were ~~down 8%~~up 30%, while sales to independent retailers increased ~~14%~~31%.

Gross profits ~~decreased~~increased by ~~$94.8~~$33.9 million, or ~~89.7%~~33.7% to ~~$10.8~~$134.3 million for the ~~third~~first quarter of ~~2021~~2022 compared to the same period last year. Our ~~decrease~~increase in gross profit was attributable to the following:

●

~~The gross profits of our ProWood business unit decreased by $68.7~~Acquired operations contributed $12 million ~~primarily due~~ to the ~~impact that declining lumber prices had on ProWood’s pressure treated products that are sold at a variable price. Decreased unit sales also contributed to the reduction~~increase in gross ~~profit.~~profits.

●

~~Acquired operations reported a loss in~~The gross profits of our Sunbelt and ~~contributed $7.2~~ProWood business units increased by a total of $12.1 million, ~~to the decrease~~primarily due to the ~~drop in~~favorable trend of rising lumber ~~prices.~~prices as the selling prices of these products are primarily determined on a variable price formula.

●

Unit sales decreases contributed $13.2 million to the decline in gross profit for our Deckorators, Retail Building Products, Handprint, and Outdoor Essentials Fence, Lawn & Garden business units. UFP Edge experienced organic unit growth of 12% due to an increase in capacity, but had a reduction in gross profit of $5.7 million due to the fluctuation of lumber prices.

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UFP INDUSTRIES, INC.

●

Our UFP Edge and Retail Building Products business units contributed $8 million to the increase in gross profits.

●

Deckorators contributed $3 million to the increase in gross profits.

Selling, general and administrative (“SG&A”) expenses ~~decreased~~increased by approximately ~~$6.6~~$15.6 million, or ~~15.2%~~33.1%, in the ~~third~~first quarter of ~~2021~~2022 compared to the same period of ~~2020.~~2021. The SG&A of recently acquired businesses contributed ~~$4.8~~$2.6 million to the change in SG&A. ~~This was offset by accrued~~Accrued bonus expense, which varies with our overall profitability and return on investment, ~~which decreased by $12.0~~increased approximtely $6.7 million and totaled approximately ~~$3.0~~$20.7 million for the quarter. The remaining change was primarily due to increases in salaries and wages ~~and~~of $2.9 million, travel related expenses ~~offset by decreases in~~of $0.8 million, and sales incentive compensation ~~and bad debt expense.~~of $0.6 million.

Earnings from operations for the Retail reportable segment ~~decreased~~increased in the ~~third~~first quarter of ~~2021~~2022 compared to ~~2020~~2021 by ~~$88.3~~$17.8 million, or ~~142%~~33%, as a result of the factors mentioned above.

Net sales in the first nine months of 2021 increased 63% compared to the same period of 2020, due to a 33% increase in selling prices and a 36% increase in unit sales from acquired operations, offset by a 6% decrease in organic unit sales. Organic unit increases of 21% of UFP Edge, 13% of Deckorators, and 7% of Outdoor Essentials, were offset by organic unit declines of 19% of ProWood and 11% of Handprint. The transfer of approximately $29 million in sales to the retail segment from the construction segment discussed above contributed to unit growth in the retail segment. Sales to big box customers were up 55% (12% organic), while sales to independent retailers decreased 5% (6% organic).

~~Gross profits increased 0.4% to $233.6 million in the first nine months of 2021 compared to the same period of 2020. Our change in gross profit was attributable to the following:~~

●

Our Retail Building Materials business unit contributed $26.3 million to the increase. This increase is primarily due to unit sales growth and rising lumber and panel prices combined with effective inventory positioning.

●

~~Our Deckorators, Outdoor Essentials, Handprint, E-Commerce, and UFP Edge business units contributed $0.2 million of additional gross profit.~~

●

~~Acquisitions contributed $6.7 million to the increase.~~

●

The gross profit of our ProWood business unit decreased by $31.8 million, primarily due to the impact that fluctuating lumber prices during the first nine months of the year had on ProWood’s pressure-treated products that are sold at a variable price.

Selling, general and administrative (“SG&A”) expenses increased by approximately $33.8 million, or 30.5%, in the first nine months of 2021 compared to the same period of 2020. The SG&A of recently acquired businesses contributed approximately $12.7 million to this increase. Accrued bonus expense, which varies with our overall profitability and return on investment, increased approximately $11.0 million and totaled approximately $37.9 for the first nine months of 2021. The remaining increase was primarily due to increases in salaries and wages, sales incentive compensation, and travel related expenses.

~~Earnings from operations for the Retail reportable segment decreased in the first nine months of 2021 compared to 2020 by $32.6 million, or 26.7% as a result of the factors mentioned above.~~

Industrial Segment

Net sales in the ~~third~~first quarter of ~~2021~~2022 increased ~~103%~~36% compared to the same period of ~~2020,~~2021, due to a ~~34% increase in unit sales from recent acquisitions and a 69%~~39% increase in selling prices, ~~attributable~~acquisition unit growth of 1%, and a 4% decrease in organic unit sales. The increase in our selling prices is a result of increases in lumber and other operating costs we’ve been able to ~~favorable~~pass on to customers, 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 ~~mix changes as well as~~includes market share gains associated with $36 million in sales to new customers, $18 million of sales to new locations of existing customers, and $22 million of new product sales. These gains were offset by the ~~Lumber Market.~~loss of unit sales on less profitable accounts.

Gross profits increased by ~~$78.3~~$69.2 million, or ~~162.5%~~86.2%, for the ~~third~~first quarter of ~~2021~~2022 compared to the same period last year. Acquisitions contributed ~~$21.5~~$1.7 million to the increase in gross profit. The remaining increase ~~was primarily due to~~is a result of the pricing increases discussed above as well as favorable changes in our value-added sales ~~mix and the decline in lumber costs. We~~mix. Excluding acquisitions, we estimate that value-added and commodity-based products contributed ~~$36.5~~$49.9 million and ~~$20.2~~$17.8 million, respectively, to the increase in gross profit.

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~~UFP INDUSTRIES, INC.~~

Selling, general and administrative (“SG&A”) expenses increased by approximately ~~$29.6~~$27.1 million, or ~~113.7%~~67.6%, in the ~~third~~first quarter of ~~2021~~2022 compared to the same period of ~~2020.~~2021. Acquired operations since the ~~third~~second quarter of ~~2020~~2021 contributed approximately ~~$7.4~~$1.3 million to our increase in costs. Accrued bonus expense, which varies with our overall profitability and return on investment, increased approximately ~~$12.6~~$13.0 million, and totaled ~~$18.7~~$23.7 million for the quarter. The remaining increase was primarily due to increases in sales incentive compensation of $4.7 million, salaries and wages ~~sales incentive compensation,~~of $2.7 million, bed debt expense of $1.7 million, and travel related ~~expenses.~~

~~Earnings from operations for the Industrial reportable segment increased in the third quarter~~expenses of ~~2021 compared to 2020 by $48.4 million, or 219.5%, due to the factors discussed above.~~

Net sales in the first nine months of 2021 increased 114% compared to the same period of 2020, due to a 67% increase in selling prices attributable to the Lumber Market and favorable sales mix changes, a 10% increase in organic unit sales, and a 37% increase in unit sales from recent acquisitions.

Gross profits in the first nine months of 2021 increased 167.3% to $213.6 million compared to the same period of 2020. Acquisitions contributed $57.9 million to the increase in gross profit. The remaining increase was primarily due to organic unit sales growth and leveraging fixed costs as well as favorable changes in sales mix. In addition, in the first six months of the year we were able to maintain our profit per unit by more effectively passing on commodity lumber and other cost increases in our selling prices.

Selling, general and administrative (“SG&A”) expenses increased by approximately $77.1 million, or 104.6%, in the first nine months of 2021 compared to the same period of 2020. Acquired operations since the third quarter of 2020 contributed approximately $21.3 million to total SG&A expenses. Accrued bonus expense increased approximately $37.9 million compared to the same period of 2020 and totaled approximately $50.4 for the first nine months of 2021. The remaining increase was primarily due to increases in salaries and wages and sales incentive compensation.$0.7 million.

Earnings from operations for the Industrial reportable segment increased in the first ~~nine months~~quarter of ~~2021~~2022 compared to ~~2020~~2021 by ~~$136.5~~$42.0 million, or ~~253.6%~~103.9%, due to the factors ~~mentioned~~discussed above.

Construction Segment

Net sales in the ~~third~~first quarter of ~~2021~~2022 increased ~~62%~~41% compared to the same period of ~~2020,~~2021, due to a ~~43%~~26% increase in selling prices, ~~attributable~~3% due to the ~~Lumber Market and~~transfer of certain sales from the Retail segment, organic unit sales growth of ~~19%~~11%, ~~including 3%~~and 1% growth from recent acquisitions. Organic unit changes within this segment consisted of increases of ~~26%~~30% in commercial construction, ~~23%~~16% in factory-built housing, 1% in site-built construction, and ~~17% in factory-built housing, offset by a 37% decrease~~13% in concrete forming. ~~The transfer~~As of ~~approximately $13~~March 26, 2022 and December 25, 2021, we estimate that backlog orders associated with commercial construction approximated $93.0 million ~~in sales to~~and $84.6 million, respectively. As of March 26, 2022 and December 25, 2021, we estimate that backlog orders associated with site-built construction approximated $141 million and $113.5 million, respectively. We expect that the ~~retail segment from~~orders above will be primarily filled within the ~~construction segment discussed above contributed to the unit decline in the concrete forming business unit.~~next fiscal year; however, it is possible that some orders could be canceled.

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UFP INDUSTRIES, INC.

Gross profits increased by ~~$92.0~~$73.0 million, or ~~148.2%~~82.0%, for the ~~third~~first quarter of ~~2021~~2022 compared to the same period of ~~2020.~~2021. The increase in our gross profit was comprised of the following factors:

●

Gross profits in our site-built construction business unit increased by $36.2 million as a result of being more selective in the business that we take during this period of elevated demand and capacity constraints. As a result, our profit per unit has improved.

●

Gross profits in our factory-built housing business unit increased ~~$20.6~~$25.2 million as a result of increased unit sales and leveraging fixed costs.

●

~~Gross profits in~~The gross profit of our ~~site-built construction~~concrete forming business unit increased by ~~$63.2~~$8.5 million, ~~due to unit sales growth and leveraging fixed costs and~~including $3.8 million as a result of ~~a decrease in lumber costs.~~the transfer of sales from the Retail segment.

●

The gross profit of our commercial construction business unit increased ~~$7.1~~$2.2 million as a result of increased unit sales, better productivity and other operational ~~improvements.~~improvements, and improved pricing discipline.

●

~~The gross profit of our concrete forming business unit decreased by $0.3 million.~~

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●

Acquired businesses contributed ~~$1.3~~$0.9 million.

Selling, general and administrative (“SG&A”) expenses increased by approximately ~~$25.2~~$26.8 million, or ~~55.6%~~48.2%, in the ~~third~~first quarter of ~~2021~~2022 compared to the same period of ~~2020.~~2021. Acquired operations since the ~~third~~second quarter of ~~2020~~2021 contributed approximately ~~$1.1~~$0.9 million to total SG&A expenses for the quarter. Accrued bonus expense, which varies with our overall profitability and return on investment, increased approximately ~~$14.8~~$13.7 million, and totaled ~~$19.5~~$22.7 million for the quarter. The remaining increase was primarily due to increases in sales incentive compensation of $5.0 million, salaries and wages ~~sales incentive compensation, medical expenses,~~of $1.9 million, bad debt expense of $1.4 million, and travel related ~~expenses.~~

~~Earnings from operations for the Construction reportable segment increased in the third quarter~~expenses of ~~2021 compared to 2020 by $67.7 million, or 409.9%, due to the factors mentioned above.~~

Net sales in the first nine months of 2021 increased 70% compared to the same period of 2020, due to a 52% increase in selling prices primarily due to the Lumber Market and unit sales growth of 18%, including 3% from acquisitions. Organic unit changes within this segment consisted of increases of 27% in factory-built housing, 21% in site-built construction, and 8% in commercial construction. These increases were offset by a unit decline of 37% in concrete forming. The transfer of approximately $29 million in sales to the retail segment from the construction segment discussed above contributed to the unit decline in the concrete forming business unit.

~~Gross profits increased by $192.5 million, or 104.4% for the first nine months of 2021 compared to the same period of 2020. The increase in our gross profits was comprised of the following factors:~~

●

~~Gross profits in our factory-built housing business unit increased by $68.8 million as a result of increased unit sales and leveraging fixed costs.~~

●

Gross profits in our site-built construction business unit increased by $105.6 million due to unit sales growth and leveraging fixed costs. In addition, we were able to maintain our profit per unit by more effectively passing on commodity lumber and other cost increases in our selling prices in the first six months of the year.

●

~~The gross profit of our commercial construction business unit increased $8.2 million as a result of increased unit sales, better productivity, and other operational improvements.~~

●

~~The gross profit of our concrete forming business unit increased $5.0 million due to the factors discussed above.~~

●

~~Acquired businesses contributed $5.0~~$0.6 million.

Selling, general and administrative (“SG&A”) expenses increased by approximately $59.0 million, or 44.0%, in the first nine months of 2021 compared to the same period of 2020. Acquired operations since the third quarter of 2020 contributed approximately $3.8 million to total SG&A expenses. Accrued bonus expense increased approximately $34.8 million compared to the same period of 2020 and totaled approximately $46.2 million for the first nine months of 2021. The remaining increase was primarily due to increases in salaries and wages, sales incentive compensation, medical expenses, and professional design fees.

Earnings from operations for the Construction reportable segment increased in the first ~~nine months~~quarter of ~~2021~~2022 compared to ~~2020~~2021 by ~~$133.8~~$45.8 million, or ~~264.7%~~138.7%, 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 gains on the sale of certain real estate.~~significant.

INCOME TAXES

OFF-BALANCE SHEET TRANSACTIONS

We have no significant off-balance sheet transactions.

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UFP INDUSTRIES, INC.

LIQUIDITY AND CAPITAL RESOURCES

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


	Nine Months Ended				Three Months Ended
	September 25,		September 26,		March 26,		March 27,
	2021		2020		2022		2021
Cash from operating activities	$	281,763	$	185,083
Cash used in operating activities					$	(245,031)	$	(196,660)
Cash used in investing activities		(528,257)		(100,927)		(59,736)		(296,498)
Cash (used in) from financing activities		(33,593)		95,178
Cash from financing activities						86,330		101,927
Effect of exchange rate changes on cash		(292)		(1,122)		1,726		(349)
Net change in all cash and cash equivalents		(280,379)		178,212		(216,711)		(391,580)
Cash, cash equivalents, and restricted cash, beginning of period		436,608		168,666		291,223		436,608
Cash, cash equivalents, and restricted cash, end of period	$	156,229	$	346,878	$	74,512	$	45,028

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. As explained in more detail below, the unusually large increase in lumber prices this year, as well as the significant increase in sales, resulted in a more significant increase in net working capital this year relative to prior years.

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~~UFP INDUSTRIES, INC.~~

Due to the seasonality of our business and the effects of the Lumber Market, we believe our cash cycle (days of sales outstanding plus days supply of inventory less days payables outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle increased to 5753 days from ~~43 days during the third quarter and to 52 days from 49~~48 days during the first ~~nine months~~quarter of ~~2021~~2022 compared to the ~~respective~~ prior ~~periods.~~year period.


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 25,		September 26,		September 25,		September 26,		March 26,		March 27,
	2021		2020		2021		2020		2022		2021
Days of sales outstanding		35		31		34		32		32		30
Days supply of inventory		43		31		38		37		41		38
Days payables outstanding		(21)		(19)		(20)		(20)		(20)		(20)
Days in cash cycle		57		43		52		49		53		48

The increase in our days supply of inventory in the first ~~nine~~three months of ~~2021~~2022 compared to the same period of ~~2020~~2021 was primarily due to ~~lower retail demand than our customers anticipated for our inventory planning. The~~a four day increase in our days supply of inventory to ensure we meet the delivery expectations or our customers and a one day increase in our receivables ~~cycle was primarily due to longer payment terms for new customers attributable to recent acquisitions.~~cycle.

In the first ~~nine~~three months of ~~2021,~~2022, our cash ~~provided~~consumed by operating activities was ~~$281.8~~$245.0 million, which was comprised of net earnings of ~~$405.4~~$193.1 million and ~~$69.1~~$35.4 million of non-cash expenses, offset by a ~~$192.7~~$473.5 million increase in working capital since the end of December ~~2020.~~2021. Our ~~operating~~ cash ~~flow this year~~flows used by operations increased by ~~$96.7~~$48.4 million compared to the same period of last year primarily due to an increase in our investment in net working capital of $148.4 million compared to the prior year period, offset by an increase in our net earnings and non-cash expenses of ~~$229.8 million, offset by~~$100.0 million. The increase in net working capital was due to higher lumber prices. the growth of our business, and an increase in our ~~investment in net working capital~~days supply of $133.1 million compared to the prior year period. This increase was due to unusually high lumber prices and increased demand in our industrial and construction segments. PalletOne and other acquisitions also contributed to the increase in our seasonal investment in net working capital.inventory.

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~~Acquisitions and purchases~~UFP INDUSTRIES, INC.

Purchases of property, plant, and equipment and acquisitions (refer to Note F for Business Combinations) and comprised most of our cash used in investing activities during the first ~~nine~~three months of ~~2021~~2022 and totaled ~~$433.3~~$32.1 million and ~~$110.1~~$24.6 million, respectively. Total proceeds from the sales of property, plant, and equipment were ~~$26.6~~$1.2 million. Outstanding purchase commitments on existing capital projects totaled approximately ~~$44.1~~$68.7 million on ~~September 25, 2021.~~March 26, 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 old 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 $147~~between $175 million to $225 million on capital projects for the ~~year.~~year with variability due to uncertainty about 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~~the capacity of machine-built pallet ~~capacity,~~and site-built business units, and take advantage of automation opportunities.

Cash flows from financing activities primarily consisted of net ~~repayments~~borrowings of debt of approximately ~~$1.4~~$101.5 million, the payment of quarterly dividends totaling ~~$27.8~~$12.5 million ($~~0.15~~0.20 per share), cash paid for repurchases of common stock of $0.5 million, and distributions to noncontrolling interests of ~~$2.9~~$2.1 million. On ~~October~~April 20, ~~2021,~~2022, our board of directors approved an increase in our ~~fourth~~second quarter dividend to ~~$0.20~~$0.25 per share, payable on ~~December~~June 15, ~~2021,~~2022, to shareholders of record on ~~December~~June 1, ~~2021.~~2022. Additionally, in April 2022, we repurchased approximately 756,000 shares for $58.5 million, at an average share price of $77.40.

On ~~September 25, 2021,~~March 26, 2022, we had ~~$3.2~~$109.7 million outstanding on our $550 million revolving credit facility, and we had approximately ~~$539.7~~$433.2 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 25, 2021.~~March 26, 2022.

At the end of the ~~third~~first quarter of ~~2021,~~2022, we have approximately ~~$667.5~~$445.3 million in total liquidity, consisting of our net cash surplus and remaining availability under our revolving credit facility. ~~We anticipate our liquidity will continue to increase in the last three months of 2021 as~~As lumber prices ~~and demand continue to~~ normalize and we ~~convert~~move beyond our ~~seasonal~~peak selling season we anticipate the increase in net working capital ~~to cash.~~will turn into strong operating cash flow in the third and fourth quarters.

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~~UFP INDUSTRIES, INC.~~

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 ~~26, 2020.~~25, 2021.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We are exposed to market risks related to fluctuations in interest rates on our variable rate debt, which consists of a revolving credit facility and industrial development revenue bonds. We do not currently use interest rate swaps, futures contracts or options on futures, or other types of derivative financial instruments to mitigate this risk.

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UFP INDUSTRIES, INC.

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 25, 2021~~March 26, 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 25, 2021,~~March 26, 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, except for the implementation of a control to address the material weakness in control over our share-based bonus awards disclosed in our 2020 Form 10-K, which was remediated in the first quarter of 2021.reporting.

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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 27 – July 31, 2021~~	—	—	—	~~1,103,957~~
~~August 1 – 28, 2021~~	—	—	—	~~1,103,957~~
~~August 29 – September 25, 2021~~	—	—	—	~~1,103,957~~


Fiscal Month	(a)	(b)	(c)	(d)
December 26, 2021 – January 29, 2022	—	—	—	2,603,958
January 30 – February 26, 2022	6,300	79.53	6,300	2,597,658
February 27 – March 26, 2022	38,142	79.77	38,142	2,559,516

(a)	Total number of shares purchased.

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UFP INDUSTRIES, INC.

(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 ~~an additional~~ 2 million shares to be repurchased under our share repurchase program. On February 15, 2022, our Board authorized an additional 1.5 million shares to be repurchased under our existing share repurchase program. The total number of remaining shares that may be repurchased under the program is approximately ~~1.1~~2.6 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.

~~Table of Contents~~

~~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).

3630

Table of Contents

UFP INDUSTRIES, INC.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	UFP INDUSTRIES, INC.

Date: ~~November 3, 2021~~May 4, 2022	By:	/s/ Matthew J. Missad
	Matthew J. Missad,
	Chief Executive Officer and Principal Executive Officer


Date: ~~November 3, 2021~~May 4, 2022	By:	/s/ Michael R. Cole
	Michael R. Cole,
	Chief Financial Officer,
	Principal Financial Officer and
	Principal Accounting Officer

3731


	Random Lengths SYP
	Average $/MBF
	2021			2020
January	$	858		$	346
February		903			345
March		938			360
April		922			333
May		1,150			412
June		1,052			494
July		564			552
August		448			729
September		438			886

Third quarter average	$	483		$	722
Year-to-date average	$	808		$	495

Third quarter percentage change		(33.1)	%
Year-to-date percentage change		63.2	%