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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 25, 2021.

OR

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period of ____ to _____.

Commission File No.:  0-22684

UFP INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

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Michigan

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38-1465835

(State or other jurisdiction of incorporation or organization)

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(I.R.S. Employer Identification No.)

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2801 East Beltline, N.E., Grand Rapids, Michigan

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49525

(Address of principal executive offices)

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(Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:

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Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, $1 par value

UFPI

The NASDAQ Global Select Market

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes ⌧            No ◻

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   Yes ◻            No ⌧

Indicate by check mark 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 check mark 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.

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Large accelerated filer ⌧

Accelerated filer ◻

Non-accelerated filer ◻

Smaller Reporting Company ☐

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Emerging growth company ☐

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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. ☐

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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

The aggregate market value of the common stock held by non-affiliates of the registrant (i.e. excluding shares held by executive officers, directors, and control persons as defined in Rule 405, 17 CFR 230.405) on June 25, 2021 was $4,240,620,108 computed at the closing price of $72.73 on that date.

As of January 30, 2022, 61,905,218 shares of the registrant’s common stock, $1 par value, were outstanding.

Documents incorporated by reference:

(1)Certain portions of the registrant’s Annual Report to Shareholders for the fiscal year ended December 25, 2021 are incorporated by reference into Part I and II of this Report.
(2)Certain portions of the registrant’s Proxy Statement for its 2022 Annual Meeting of Shareholders are incorporated by reference into Part III of this Report.

Exhibit Index located on page E-16.

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ANNUAL REPORT ON FORM 10-K

DECEMBER 25, 2021

TABLE OF CONTENTS

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PART I

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Item 1.

Business.

2

Item 1A.

Risk Factors.

5

Item 1B.

Unresolved Staff Comments.

7

Item 2.

Properties.

7

Item 3.

Legal Proceedings.

10

Item 4.

Mine Safety Disclosures.

10

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Additional item: Executive Officers of the Registrant.

10

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PART II

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Item 5.

Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.

11

Item 6.

Selected Financial Data.

11

Item 7.

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

11

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk.

11

Item 8.

Financial Statements and Supplementary Data.

12

Item 9.

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

12

Item 9A.

Controls and Procedures.

12

Item 9B.

Other Information.

13

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PART III

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Item 10.

Directors, Executive Officers and Corporate Governance.

13

Item 11.

Executive Compensation.

13

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.

13

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

14

Item 14.

Principal Accountant Fees and Services.

14

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PART IV

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Item 15.

Exhibits, Financial Statement Schedules.

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1

PART I

Item 1. Business.

General Development of the Business.

UFP Industries, Inc. (“we” or “our”) is a holding company with subsidiaries throughout North America, Europe, Asia, and Australia that supply products primarily manufactured from wood, wood and non-wood composites, and other materials 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.

Information relating to current developments in our business is incorporated by reference from our Annual Report to Shareholders for the fiscal year ended December 25, 2021 ("2021 Annual Report") under the caption "Management’s Discussion and Analysis of Financial Condition and Results of Operations."  Selected portions of the 2021 Annual Report are filed as Exhibit 13 with this Form 10-K Report.

Financial Information About Segments.

ASC 280, Segment Reporting (“ASC 280”) defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Our business segments consist of UFP Retail Solutions, UFP Industrial and UFP Construction and align with the markets we serve. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit and business units are included in our Retail, Industrial, and Construction segments. The exception to this market-centered reporting and management structure is the Company’s International segment, which comprises our Mexico, Canada, Europe, Asia and Australia operations and sales and buying offices in other parts of the world. Our International segment and Ardellis (our insurance captive) are referred to as “All Other” throughout this report. The Corporate segment includes purchasing, transportation and administrative functions that serve our operating segments. Operating results of Corporate primarily consists of over (under) allocated costs, the operating results of UFP Real Estate, Inc., which owns and leases real estate, and UFP Transportation Ltd., which owns, leases and operates transportation equipment, are also included in Corporate.

Narrative Description of Business.

We design, manufacture and market wood and wood-alternative products, primarily used to enhance outdoor living environments, for national home centers and other retailers; roof trusses, structural lumber and panels, and other products for the manufactured housing industry; engineered wood components for residential and commercial construction, customized interior fixtures, millwork, and casework used in a variety of retail, commercial and other structures; and structural wood packaging, other packing materials, and OEM components for various industries. Each of our segments, Retail, Industrial and Construction, are discussed in the paragraphs that follow.

Retail segment. The customers comprising this segment are national home center retailers, retail-oriented regional lumberyards and contractor-oriented lumberyards. Generally, terms of sale are established for annual or bi-annual periods, and orders are placed with our regional facilities in accordance with established terms. Our two largest customers, The Home Depot and Lowes, accounted for approximately 16% and 10%, respectively, of our total net sales in fiscal 2021, 24% and 4%, respectively, in 2020, and 19% and 4%, respectively, in 2019.

We supply customers in this segment from many of our locations. These regional facilities are able to supply mixed truckloads of products which can be delivered to customers with rapid turnaround from receipt of an order. Freight costs are a factor in the ability to competitively service this market, especially with treated wood products because of their heavier weight. The proximity of our regional facilities to the various outlets of these customers is a factor when developing and establishing annual sales programs.

2

The products offered to customers in this segment include dimensional lumber (both preserved and unpreserved) and various "value-added products," some of which are sold under our trademarks. In addition to our conventional lumber products, we offer a large portfolio of outdoor living products, including wood and wood composite decking and related accessories, decorative lawn and garden products and craft and hobby products. Products sold to this segment include those sold under the following trademarks: ProWood, ProWood FR, Deckorators, UFP-Edge, Outdoor Essentials, Dimensions, and Handprint. These product categories also comprise the business units within our retail segment. We estimate we produce approximately 27% of all treated wood, 8-10% of all composite decking and accessories, 8% of all wood and vinyl fencing and 1% of all lawn and garden products in the United States of America.

We are not aware of any competitor that currently manufactures, treats and distributes a full line of both value-added and commodity-based products on a national basis as we do within our retail segment. We face competition on individual products from several different producers, but the majority of these competitors tend to be regional in their efforts and/or do not offer a full line of outdoor lumber products. We believe the breadth of our product offering, scale and geographic dispersion, proximity of our plants to core customers, product innovation initiatives, purchasing and manufacturing expertise, and service capabilities provide competitive advantages in this market. Refer to Note M “Segment Reporting” of the registrant’s Annual Report to Shareholders for the fiscal year ended December 25, 2021 for our disaggregated net sales by business unit for the retail segment.

Industrial segment. We define our industrial segment as manufacturers and agricultural customers who use pallets, specialty crates, wooden boxes, and other containers used for packaging, shipping and material handling purposes, as well as various other products, including protective packaging, used in a variety of different applications. Many of the wood-based products sold to this market may be produced from the wood by-product of other manufactured products, thereby allowing us to increase our raw material yields while expanding our business. Competition is fragmented and includes virtually every supplier of lumber convenient to the customer. We service this segment with our dedicated regional and national sales teams. The business units comprising out industrial segment are organized geographically. We currently supply approximately 8% of all domestic wood packaging, which includes estimated market share of 7% of machine-built wood pallets and 13% of custom wood packaging. Refer to Note M “Segment Reporting” of the registrant’s Annual Report to Shareholders for the fiscal year ended December 25, 2021 for our disaggregated net sales by business unit for the industrial segment.

Construction segment. Our construction segment is made up of customers in four primary markets – factory-built housing, site-built residential construction, commercial construction, and concrete forming, which represent the business units of our construction segment.

The customers comprising the factory-built housing market are producers of mobile, modular and prefabricated homes and recreational vehicles (RV). Products sold to customers in this market consist primarily of roof trusses, lumber cut and shaped to the customer’s specification, plywood, oriented strand board and dimensional lumber, all intended for use in the construction of manufactured housing. Sales are made by personnel located at each regional facility based on customer orders. Our principal competitive advantages include our product knowledge, the strength of our engineering support services, the proximity of our regional facilities to our customers, our purchasing and manufacturing expertise and our ability to provide national sales programs to certain customers. As a result of these advantages, we estimate we produce approximately 45% of all roof trusses used in factory-built housing in the United States of America. We also distribute products such as siding, electrical and plumbing products to factory-built housing and RV customers.

3

The customers comprising the site-built residential construction market are primarily large-volume, multi-tract builders and smaller volume custom builders. We also supply builders engaged in multi-family and light commercial construction. Competition in this market is primarily fragmented, but we do compete with a small number of national and regional retail contractor yards who also manufacture components and provide framing services, as well as regional manufacturers of components. We believe our primary competitive advantages relate to the engineering and design capabilities of our regional staff, purchasing and manufacturing expertise, product quality, timeliness of delivery, and financial strength, as well as providing a comprehensive turn-key package, including installation. As a result of these strengths, we estimate we produce approximately 5% of all engineered wood components used in housing in the United States of America. Generally, terms of sale and pricing are determined based on contracts we entered into with our customers.  We currently supply customers in these markets from manufacturing facilities located in many different states. These facilities manufacture various engineered wood components used to frame residential or light commercial projects, including roof and floor trusses, wall panels, I-joists and lumber packages. Freight costs are a factor in the ability to competitively service this market due to the space requirements of these products on each truckload. We also provide framing services for builders in certain regional markets, in which we erect the wood structure.

Our commercial business unit primarily includes the operations of idX Holdings, Inc. ("idX"). idX is a designer, manufacturer and installer of highly customized interior fixtures, casework and millwork used in a variety of retail and commercial structures representing several end markets.

Finally, we design, manufacture, and supply wood forms and related products which are used by our customers to set or form concrete for various structures, including large parking garages, stadiums and bridges. Refer to Note M “Segment Reporting” of the registrant’s Annual Report to Shareholders for the fiscal year ended December 25, 2021 for our disaggregated net sales by business unit for the construction segment.

Suppliers. We are one of the largest domestic buyers of solid sawn softwood lumber from primary producers (lumber mills). We use primarily southern yellow pine in our pressure-treating operations and site-built component plants in the Southeastern United States, which we obtain from mills located throughout the states comprising the Sunbelt. Other species we use include "spruce-pine-fir" from various provinces in Canada; hemlock, douglas fir and cedar from the Pacific Northwest; inland species of pine, plantation grown radiata and southern yellow pines from South America; and European spruce. During 2021 our annual purchases of lumber totaled approximately $3.0 billion and consisted of the following species and their respective percent of total lumber purchases: southern yellow pine (57%), spruce-pine-fir (22%), and douglas fir (4%), while the remaining 17% of lumber purchases comprise various other species and imports outside of North America.  Additionally, we purchased approximately $1.0 billion in plywood in 2021. There are numerous primary producers for all varieties we use, and we are not dependent on any particular source of supply. Our financial resources and size, in combination with our strong sales network and ability to remanufacture lumber, enable us to purchase a large percentage of a primary producer’s output (as opposed to only those dimensions or grades in immediate need), thereby lowering our average cost of raw materials and allowing us to obtain favorable programs such as consigned inventory. We believe these represent competitive advantages.

Intellectual Property. We own several patents and have several patents pending on technologies related to our business. In addition, we own numerous registered trademarks and claim common law trademark rights to several others. As we develop proprietary brands, we may pursue registration or other formal protection. While we believe our patent and trademark rights are valuable, the loss of a patent or any trademark would not be likely to have a material adverse impact on our competitive position.

Backlog. Due to the nature of our retail and industrial businesses, backlog information is not meaningful. The maximum time between receipt of a firm order and shipment does not usually exceed a few days. Therefore, we would not normally have a backlog of unfilled orders in a material amount. The relationships with our major customers are such that we are either the exclusive supplier of certain products and/or certain geographic areas, or the designated source for a specified portion of the customer’s requirements. In such cases, either we are able to forecast the customer’s requirements, or the customer may provide an estimate of its future needs. In neither case, however, will we receive firm orders until just prior to the anticipated delivery dates for the products in question.

4

On December 25, 2021 and December 26, 2020, we estimate that backlog orders associated with our customized interior fixture businesses approximated $84.6 million and $65.2 million, respectively.

On December 25, 2021 and December 26, 2020, we estimate that backlog orders associated with our site-built construction businesses approximated $113.5 million and $106.0 million, respectively. We expect that the orders above will be primarily filled within the next fiscal year; however, it is possible that some orders could be canceled.

Environmental. Information required for environmental disclosures is incorporated by reference from Note L of the Consolidated Financial Statements presented under Item 8 herein.

Seasonality. Information required for seasonality disclosures is incorporated by reference from Item 1A. Risk Factors under the caption “Seasonality and weather conditions could adversely affect us.”

Employees. On December 25, 2021, we had approximately 15,000 employees. For over 65 years, the success of our company has rested on the skill, motivation and performance of our employees.  We treat our people honestly and fairly, creating career paths and training opportunities to develop and expand their scope of responsibilities and financial rewards.  This approach to human capital, which is embedded in the Company's culture, has fostered an environment where our employees often commit their respective careers to UFP Industries, Inc.

Available Information.

Our Internet address is www.ufpi.com. Through our Internet website under "Financial Information" in the Investor Relations section, we make available free of charge, as soon as reasonably practical after such information has been filed with the SEC, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act. Also available through our Internet website under "Corporate Governance" in the Investor Relations section is our Code of Ethics for Senior Financial Officers.

Reports to Security Holders.

Not applicable.

Enforceability of Civil Liabilities Against Foreign Persons.

Not applicable.

Item 1A. Risk Factors.

We may be impacted by a significant change in the value of the U.S. dollar and our results of operations may be harmed by currency fluctuations and inflation. We purchase a variety of raw materials and finished goods from sources around the world and export certain products. The impact of a change in U.S. dollar exchange rates, and inflation, would impact our import purchases and export sales, which totaled $806.8 million and $181.3 million, respectively, in 2021. In addition, many of our industrial customers export their products.

5

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 and 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, cost of materials, and gross profits. Our products are generally priced to the customer based on a quoted, fixed selling price or "indexed" to the Lumber Market with a fixed dollar adder to cover conversion costs and profit. The impact on our profitability from changes in lumber prices is discussed in the “Historical Lumber Prices” and "Impact of the Lumber Market on Our Operating Results" captions of our Management’s Discussion and Analysis of Financial Condition and Results of Operations section under Item 7 of this Form 10-K. Our lumber costs, including plywood, as a percentage of net sales were 47.7%, 51.0%, and 43.4% in 2021, 2020, and 2019, respectively.

Our growth may be limited by the markets we serve, including our construction market which is highly cyclical. Our sales growth is dependent, in part, upon the growth of the markets we serve. If our markets do not achieve anticipated growth, or if we fail to maintain our market share, financial results could be impaired.

A significant portion of our sales are concentrated with two customers. Our sales to The Home Depot and Lowes comprised 16% and 10%, respectively, of our total net sales in fiscal 2021, 24% and 4%, respectively, in 2020, and 19% and 4%, respectively, in 2019.

We may be impacted by vertical integration strategies. In certain markets and product lines, our customers or vendors could pursue vertical integration strategies that could have an adverse effect on our sales. We strive to add value and be a low-cost producer while maintaining competitive pricing in each of our markets to mitigate this risk.

We may be impacted by industry capacity of products we supply. From time to time, we may experience excess capacity among suppliers of certain products in some of the markets we serve. Our selling prices and profitability are impacted during periods of shortages or excess industry capacity relative to market demand. Currently, we may also experience limited capacity among suppliers of certain products as a result of supply chain challenges associated with the COVID-19 pandemic, which may impact our profitability and ability to meet sales objectives.

Our growth may be limited by our ability to make successful acquisitions. A key component of our growth strategy is to complete business combinations. Business combinations involve inherent risks, including assimilation and successfully managing growth. While we conduct extensive due diligence and have taken steps to ensure successful assimilation, factors beyond our control could influence the relative success of these acquisitions.

We may be adversely affected by the impact of environmental and safety regulations. We are subject to the requirements of federal, state, and local environmental and occupational health and safety laws and regulations. There can be no assurance that we are at all times in complete compliance with all of these requirements. We have made and will continue to make capital and other expenditures to comply with environmental regulations. If additional laws and regulations are enacted, which restrict our ability to manufacture and market our products, including our treated lumber products, it could adversely affect our sales and profits. Changes in the interpretation of existing laws could also adversely impact our financial results.

Climate change - seasonality and weather conditions due to climate changes could adversely affect us. Some aspects of our business are seasonal in nature and results of operations vary from quarter to quarter. In addition, the majority of our products sold to the Retail and Construction markets are used or installed in outdoor construction applications; therefore, short-term sales volume, productivity and gross profits can be negatively affected by adverse weather conditions, particularly in our first and fourth quarters. To the extent changes in the world’s climate have a greater impact on adverse weather conditions, we would expect more variability in our business operations and results.

Inbound and outbound transportation costs represent a significant part of our cost structure. An increase in fuel and other operating expenses will significantly increase our costs. While we attempt to pass these costs along to our customers, there can be no assurance that they would agree to these price increases. Our total inbound and outbound transportation costs were approximately 7.3%, 9.2%, and 9.5% of net sales in 2021, 2020, and 2019, respectively.

6

New alternatives may be developed to replace traditional treated wood products. The manufacturers of wood preservatives continue to develop new preservatives. While we believe treated products are reasonably priced relative to alternative products such as composites or vinyl, new alternatives may impact the sales of treated wood products. In addition, new preservatives could increase our cost of treating products in the future.

Cybersecurity breaches and a failure in our e-commerce operations and could disrupt our business. We rely upon information technology systems and network products and the secure operation of these systems and products.  Despite security measures, these systems and products may be vulnerable to physical damage, hackers, computer viruses, or breaches due to errors or malfeasance by employees, vendors, or customers.  We have experienced such events in the past and, although past events were immaterial, future events may occur and may be material. Additionally, consumers are increasingly shopping online and through mobile commerce applications. As a result, we are vulnerable to additional risks and uncertainties associated with e-commerce sales, including rapid changes in technology, website downtime and other technical failures, security breaches, cyber-attacks, consumer privacy concerns, changes in state tax regimes and government regulation of internet activities. Our failure to successfully respond to these risks and uncertainties could reduce our e-commerce sales and increase our costs, which could negatively impact our results of operations. In addition, there is no guarantee that we will be able to expand our e-commerce business. Our competitors may have e-commerce businesses that are substantially larger and more developed than ours, which could place us at a competitive disadvantage.

We may be impacted by new tariffs and duties on U.S. imports and foreign export sales.  Instability of established free trade agreements may lead to raw material and finished goods price volatility.  An increase in foreign tariffs on U.S. goods could curtail our export sales to other countries which was approximately $181.3 million in 2021.  Increased tariffs and duties on U.S. imports will increase pricing by adding duty cost, where the duty is sustainable in light of overall unit price, or otherwise constrain supply by eliminating historical production sources by country or commodity type with unsustainable duties.  Our purchases that are impacted by foreign tariffs were approximately $806.8 million in 2021, including UFP’s U.S. import of Canadian Softwood Lumber of approximately $513.9 million, which is the largest imported commodity.  In addition, there is a risk that U.S. tariffs on imports and countering tariffs on U.S. exports could trigger broader international trade conflicts that could adversely impact our business.

We may be adversely affected by the impact of the COVID-19 (Coronavirus) pandemic and similar outbreaks. Disease outbreaks, such as the COVID-19 pandemic, could have an adverse impact on the Company's operations and financial results. These outbreaks may adversely impact our business, consolidated results of operations and financial condition, such as the current COVID-19 pandemic. COVID-19, as well as measures taken by governmental authorities and businesses to limit the spread of this virus, may result in an adverse change in customer demand and our sales, interfere with the ability of our employees and suppliers to perform and function in a manner consistent with targeted objectives and otherwise adversely impact the efficiency of our operations. This has caused, and may continue to cause, us to materially curtail certain segments, and could have a material adverse effect on the results of our operations and cash flow.

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Adverse economic conditions and our customers’ ability to operate may impact their ability to pay. This may result in higher write-offs of receivables than we normally experience. We continue to monitor our customers’ business activities, payment patterns, and credit profiles carefully and make changes in our terms when necessary in response to this risk. As a result, our accounts receivable aging as of December 25, 2021 was approximately 92% current. Our bad debt expense as a percentage of sales was 0.01%, 0.02%, and 0.09%, in 2021, 2020, and 2019, respectively. During the most difficult collection period of the Great Recession, from 2008 through 2010, our bad debt expense as a percentage of sales averaged 0.25%.

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Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

Our corporate headquarters building is located in suburban Grand Rapids, Michigan. We currently have approximately 216 facilities located throughout the United States, Canada, Mexico, Europe, Asia, and Australia. Depending upon function and location, these facilities typically utilize office, manufacturing, and indoor and outdoor storage space.

7

The following tables summarize our property locations assigned by the primary segment the plant serves. Due to the nature of our business and historical operating strategy, many of our locations service more than one segment.

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RETAIL SEGMENT

Property Location

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Number of Properties

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Property Location

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Number of Properties

Athens, AL

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1

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Puerto Rico

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1

Bartow, FL

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1

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Ranson, WV

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1

Bonner, MT

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2

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Ringgold, GA

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1

Dodgeville, WI

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1

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Rockledge, FL

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1

Elizabeth City, NC

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1

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Rockwell, NC

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1

Fort Worth, TX

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1

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Saginaw, TX

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1

Gainesville, GA

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1

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Salina, KS

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1

Hamilton, OH

​

1

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Schertz, TX

​

1

Harrisonville, MO

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1

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Selma, AL

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2

Hendersonville, NC

​

1

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Silsbee, TX

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1

Janesville, WI

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2

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South Greer, SC

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1

Kansas City, MO

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1

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Stockertown, PA

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1

Kearneysville, WV

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2

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Tampa, FL

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2

Lansing, MI

​

1

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Thomaston, GA

​

1

Lockhart, FL

​

1

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Union City, GA

​

1

Louisville, AL

​

1

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White Bear Lake, MN

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2

Matthews, NC

​

1

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White City, OR

​

1

Moultrie, GA

​

1

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White Pigeon, MI

​

1

Poulsbo, WA

​

1

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Windsor, CO

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3

Prairie du Chien, WI

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2

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TOTAL

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48

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INDUSTRIAL SEGMENT

Property Location

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Number of Properties

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Property Location

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Number of Properties

Adairsville, GA

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1

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Milwaukee, WI

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1

Ashburn, GA

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1

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Mocksville, NC

​

1

Auburndale, FL

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2

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Morristown, TN

​

1

Barnesville, GA

​

1

​

Nappanee, IN

​

1

Bartow, FL

​

2

​

New Boston, TX

​

1

Blanchester, OH

​

1

​

New London, WI

​

2

Blue Island, IL

​

1

​

Newnan, GA

​

2

Burnsville, MN

​

1

​

Newton, NC

​

1

Butner, NC

​

2

​

Orangeburg, SC

​

1

Chaffee, NY

​

1

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Peru, IL

​

1

Chandler, AZ

​

2

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Port Arthur, TX

​

1

Chase City, VA

​

1

​

Prattville, AL

​

1

Clarksville, TX

​

2

​

Rancho Cucamonga, CA

​

1

Dallas, TX

​

1

​

Riverside, CA

​

1

Douglas, GA

​

1

​

Robertsdale, AL

​

1

Eatonton, GA

​

2

​

Rowesville, SC

​

1

Forsyth, GA

​

1

​

Salisbury, NC

​

2

Franklinton, NC

​

1

​

Selma, AL

​

1

Gilmer, TX

​

1

​

Sharon, TN

​

2

Grandview, TX

​

4

​

Shawnee, OK

​

1

Hartford, WI

​

1

​

Shipshewana, IN

​

1

Hazlehurst, GA

​

2

​

Siler City, NC

​

1

Huntsville, TX

​

1

​

Snohomish, WA

​

1

Lawrenceburg, TN

​

1

​

Thornton, CA

​

1

Livermore Falls, ME

​

1

​

Walker, MI

​

1

Magna, UT

​

1

​

Warrens, WI

​

1

Marietta, GA

​

1

​

Waterloo, WI

​

1

Martin, TN

​

1

​

Wenatchee, WA

​

1

McMinnville, OR

​

2

​

Woodburn, OR

​

3

Miami, FL

​

1

​

Yakima, WA

​

1

​

​

​

​

TOTAL

​

77

8

​

​

​

​

​

​

​

CONSTRUCTION SEGMENT

Property Location

​

Number of Properties

​

Property Location

​

Number of Properties

Athena, OR

​

1

​

Lafayette, CO

​

1

Auburn, NY

​

1

​

Liberty, NC

​

1

Aurora, CO

​

1

​

Locust, NC

​

1

Bangalore

​

1

​

London, United Kingdom

​

1

Belchertown, MA

​

1

​

Londonderry, NH

​

1

Berlin, NJ

​

2

​

Minneota, MN

​

1

Bridgeton, MO

​

1

​

Nampa, ID

​

1

Brooklyn Center, MN

​

1

​

Naugatuck, CT

​

1

Burlington, NC

​

1

​

New London, NC

​

1

Cedar Hill, TX

​

1

​

New Windsor, MD

​

1

Chesapeake, VA

​

1

​

Ontario, CA

​

1

Chicago, IL

​

1

​

Ooltewah, TN

​

1

Clinton, NC

​

1

​

Parker, PA

​

2

Conway, SC

​

1

​

Payallup, WA

​

1

Cordele, GA

​

1

​

Pearisburg, VA

​

1

Dayton, OH

​

1

​

Plainville, MA

​

1

Delano, PA

​

1

​

San Antonio, TX

​

2

Elkhart, IN

​

3

​

Sidney, NY

​

1

Folkston, GA

​

2

​

St. Louis, MO

​

1

Fredericksburg, VA

​

1

​

Stafford, TX

​

1

Gordon, PA

​

1

​

Stanfield, NC

​

2

Granger, IN

​

1

​

Temple, TX

​

1

Granger, IN

​

1

​

Vaughan, ON

​

1

Haleyville, AL

​

3

​

Washington, NC

​

1

Hillsboro, TX

​

1

​

West Berlin, NJ

​

1

Hudson, NY

​

1

​

Wilton, NH

​

1

Jefferson, GA

​

1

​

Wujiang City, Jiangsu Province, China

​

1

Kyle, TX

​

1

​

Narrows, VA

​

1

​

​

​

​

TOTAL

​

65

​

​

​

​

​

​

​

ALL OTHER SEGMENT

Property Location

​

Number of Properties

​

Property Location

​

Number of Properties

Apaseo el Grande, Gto., Mexico

​

1

​

Attibele, India

​

1

Chateauguay, Quebec, Canada

​

1

​

Jigani, India

​

1

Cambiago MI, Italy

​

1

​

Pune, India

​

1

Durango, Mexico

​

1

​

Chennai, India

​

1

Erskine Park, Australia

​

1

​

Noida, India

​

1

Lacolle, Quebec, Canada

​

1

​

Indore, India

​

1

Nuevo Leon, Mexico

​

1

​

Hyderbad, India

​

1

Victoria, Australia

​

4

​

Vadodara, India

​

1

Yeerongpilly, Australia

​

1

​

Karnataka, India

​

1

Koraluru, India

​

1

​

Utica, NY

​

1

Coimbatore, India

​

1

​

TOTAL

​

24

​

​

​

​

​

​

​

CORPORATE SEGMENT

​

​

​

​

Property Location

​

Number of Properties

​

​

​

​

Grand Rapids, MI

​

1

​

​

​

​

Norton Shores, MI

​

1

​

​

​

​

TOTAL

​

2

​

​

​

​

​

We own all of our properties, free from any significant mortgage or other encumbrance, except for approximately 105 facilities which are leased. We believe all of these operating facilities are adequate in capacity and condition to service our existing markets.

9

Item 3. Legal Proceedings.

Information regarding our legal proceedings is set forth in Note L of our Consolidated Financial Statements which are presented under Item 8 of this Form 10-K and are incorporated herein by reference.

Item 4. Mine Safety Disclosures.

Not applicable.

Additional Item:  Executive Officers of the Registrant.

The following table lists the names, ages, and positions of our executive officers as of February 1, 2022. Executive officers are elected annually by the Board of Directors at the first meeting of the Board following the annual meeting of shareholders.

​

​

​

​

​

Name

    

Age

    

Position

Matthew J. Missad

​

61

​

Chief Executive Officer

Patrick M. Webster

​

62

​

President and Chief Operating Officer

Michael R. Cole

​

55

​

Chief Financial Officer and Treasurer

Allen T. Peters

​

54

​

President and Chief Operating Officer of UFP Retail Solutions, LLC

Patrick M. Benton

​

52

​

President of UFP Construction, LLC

Scott A. Worthington

​

51

​

President of UFP Industrial, LLC

Scott T. Bravata

​

57

​

Vice President of Accounting and Administration

David A. Tutas

​

52

​

General Counsel, Chief Compliance Officer and Secretary

​

Matthew J. Missad joined us in 1985. In February 1996, Mr. Missad was promoted to Executive Vice President of the Company. On July 13, 2011, Mr. Missad became Chief Executive Officer of the Company.

Patrick M. Webster joined us in 1985. Mr. Webster became Vice President of the Far West Region in 1999, on July 1, 2007, he became President of UFP Western Division, Inc., and on January 1, 2009 became President and Chief Operating Officer of the Company.

Michael R. Cole joined us in 1993 from the international public accounting firm Deloitte & Touche. In December 1999, he was promoted to Vice President of Finance. On July 19, 2000, Mr. Cole became Chief Financial Officer of the Company.

Allen T. Peters joined us in 1997.  In 2004 he became the General Manager of Operations of our plant in Harrisonville, MO and in 2007 became Regional Vice President of our Gulf Region. On January 1, 2011, Mr. Peters became President of UFP Western Division, Inc, and on January 1, 2020, he became President and COO of UFP Retail Solutions, LLC.

Patrick M. Benton joined us in 1993. In 2008 he became Operations Vice President of the South Texas Region, and on July 1, 2014, he became Executive Vice President of UFP Eastern Division – North.  On February 1, 2017, Mr. Benton became President of the UFP Northern Division, and on January 1, 2020, he became President of UFP Construction, LLC.

Scott A. Worthington joined us in 1997. In 2007, he became General Manager of Operations of our plant in New Waverly, TX, and on August 1, 2014, he became Regional Vice President of the South Texas Region. On January 1, 2020, he became President of UFP Industrial, LLC

Scott T. Bravata joined us in 1988. He became Director of Wholesale Accounting in 1989 and became Corporate Controller in 1997. On February 27, 2006, he became Vice President of Accounting and Administration.

10

David A. Tutas joined us in 2003 as a staff counsel. In 2007, he was promoted to Director of Legal Services. On August 1, 2011, he was promoted to General Counsel. On January 18, 2013, he became Secretary of the Company, and on February 1, 2019, he became Chief Compliance Officer.

PART II

The following information items in this Part II, which are contained in the 2021 Annual Report, are specifically incorporated by reference into this Form 10-K Report. These portions of the 2021 Annual Report that are specifically incorporated by reference are filed as Exhibit 13 with this Form 10-K Report.

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.

(a)The information relating to market, holders and dividends is incorporated by reference from the 2021 Annual Report under the caption “Stock Performance Graph.”

There were no sales of unregistered securities during the last three years.

(b)Not applicable.
(c)Issuer purchases of equity securities during the fourth quarter.

​

​

​

​

​

​

​

​

​

Fiscal Month

    

(a)

    

(b)

    

(c)

    

(d)

September 26 – October 30, 2021

 

—

 

—

 

—

 

—

October 31 – November 27, 2021

 

—

​

—

 

—

 

—

November 28 – December 25, 2021

 

—

​

—

 

—

 

—

(a)Total number of shares purchased.
(b)Average price paid per share.
(c)Total number of shares purchased as part of publicly announced plans or programs.
(d)Maximum number of shares that may yet be purchased under the plans or programs.

Effective 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 2.6 million through the period ending February 3, 2023.

Item 6. Selected Financial Data.

The information required by this Item is incorporated by reference from the 2021 Annual Report under the caption "Selected Financial Data."

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The information required by this item is incorporated by reference from the 2021 Annual Report under the caption "Management’s Discussion and Analysis of Financial Condition and Results of Operations."

Item 7A. 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 enter into any material interest rate swaps, futures contracts or options on futures, or other types of derivative financial instruments to mitigate this risk.

11

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.

On December 25, 2021, the estimated fair value of our long-term debt, including the current portion, was $329.7 million. The estimated fair value is based on rates anticipated to be available to us for debt with similar terms and maturities. The estimated fair value of notes payable included in current liabilities and the revolving credit facility approximated the carrying values as these debt instruments have interest rates that fluctuate with current market conditions.

Expected cash flows over the next five years related to debt instruments, excluding debt issuance costs, are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

($US equivalents, in thousands)

2022

    

2023

    

2024

    

2025

    

2026

    

Thereafter

    

Total

Long-term Debt:

 

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Fixed Rate ($US)

$

35,028

 

$

1,044

 

$

40,214

 

$

—

 

$

302

​

$

225,000

 

$

301,588

Average interest rate

 

3.89

%  

 

9.65

%  

 

4.05

%  

 

—

​

​

9.65

%  

 

3.55

%  

​

  

Variable Rate ($US)

$

7,655

 

$

7,819

 

$

—

 

$

—

​

$

—

​

$

3,300

 

$

18,774

Average interest rate(1)

 

9.44

%  

​

1.06

%  

​

—

​

​

—

​

 

—

​

 

0.14

%  

​

  

(1) Average of rates at December 25, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Item 8. Financial Statements and Supplementary Data.

The information required by this Item is incorporated by reference from the 2021 Annual Report under the following captions:

"Report of Independent Registered Public Accounting Firm"

"Report of Independent Registered Public Accounting Firm"

"Consolidated Balance Sheets"

"Consolidated Statements of Earnings and Comprehensive Income"

"Consolidated Statements of Shareholders’ Equity"

"Consolidated Statements of Cash Flows"

"Notes to Consolidated Financial Statements"

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, referred to herein as “Disclosure Controls”) as of the end of the period covered by this Annual Report on Form 10-K. The controls evaluation was performed under the supervision and with the participation of management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO). Based upon our most recent evaluation, we have concluded that the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects,

12

our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act and based upon the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our management assessed the effectiveness of our internal control over financial reporting as of December 25, 2021. Based on this assessment, our internal control over financial reporting was effective as of December 25, 2021.

Deloitte & Touche LLP, our independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 25, 2021. Deloitte & Touche LLP's opinion, as stated in their report which appears on page 22 of this Form 10-K, is consistent with management's report on internal control over financial reporting as set forth above.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 25, 2021, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Information relating to our directors, compliance with Section 16(a) of the Securities and Exchange Act of 1934 and various corporate governance matters is incorporated by reference from our definitive Proxy Statement for the year ended December 25, 2021 for the 2022 Annual Meeting of Shareholders, as filed with the Commission ("2022 Proxy Statement"), under the captions "Election of Directors," "Corporate Governance and Board Matters," and "Section 16(a) Beneficial Ownership Reporting Compliance."  Information relating to executive officers is included in this report in the last Section of Part I under the caption "Additional Item: Executive Officers of the Registrant."  Information relating to our code of ethics is included in this report in Part I, Item 1 under the caption “Available Information”.

Item 11. Executive Compensation.

Information relating to director and executive compensation is incorporated by reference from the 2022 Proxy Statement under the caption "Executive Compensation."  The "Personnel and Compensation Committee Report" included in the 2022 Proxy Statement is incorporated by reference for the purpose of being furnished herein and is not and shall not be deemed to be filed under the Securities Exchange Act of 1934, as amended.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.

Information relating to security ownership of certain beneficial owners and management is incorporated by reference from our 2022 Proxy Statement under the captions "Ownership of Common Stock" and "Securities Ownership of Management."

13

Information relating to securities authorized for issuance under equity compensation plans as of December 25, 2021, is as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Number of shares

​

​

​

​

​

​

remaining

​

​

​

​

​

​

available for 

​

​

Number of

​

​

​

future issuance

​

​

shares to be

​

​

​

under equity

​

​

issued upon

​

Weighted average

​

compensation

​

​

exercise of

​

exercise price of

​

plans [excluding

​

​

outstanding

​

outstanding

​

shares reflected in

​

​

options

​

options

​

column (a)] (1)

​

​

(a)

​

(b)

​

(c)

Equity compensation plans approved by security holders

    

—

    

$

—

    

1,474,858

Equity compensation plans not approved by security holders

​

none

  

​

​

  

​

(1)The number of shares remaining available for future issuance under equity compensation plans, excluding outstanding options, warrants, or similar rights, as of December 25, 2021, is as follows: 456,019 shares for our Employee Stock Purchase Plan, 197,041 shares for our Directors’ Retainer Stock Plan, and 14,055 shares for our Employee Stock Gift Program. In addition, of the remaining 807,743 shares available for future issuance under our Long-Term Stock Incentive Plan, those awards may be made in the form of options as well as stock appreciation rights, restricted stock, performance shares, or other stock-based awards.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Information relating to certain relationships and related transactions, and director independence is incorporated by reference from the 2022 Proxy Statement under the captions "Election of Directors", “Affirmative Determination Regarding Director Independence and Other Matters” and "Related Party Transactions."

Item 14. Principal Accountant Fees and Services.

Information relating to the types of services rendered by our Independent Registered Public Accounting Firm and the fees paid for these services is incorporated by reference from our 2022 Proxy Statement under the caption "Independent Registered Public Accounting Firm – Disclosure of Fees.”

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)1.    Financial Statements. The following are incorporated by reference, under Item 8 of this report, from the 2021 Annual Report:

Management’s Report on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

Consolidated Statements of Earnings and Comprehensive Income

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

2.    Financial Statement Schedules. All schedules required by this Form 10-K Report have been omitted because they were inapplicable, included in the Consolidated Financial Statements or Notes to Consolidated Financial Statements, or otherwise not required under instructions contained in Regulation S-X.

14

3.    Exhibits. Reference is made to the Exhibit Index which is included in this Form 10-K Report.

(b)Reference is made to the Exhibit Index which is included in this Form 10-K Report.
(c)Not applicable

​

​

​

15

EXHIBIT INDEX

Exhibit #

    

Description

​

​

​

​

3

​

Articles of Incorporation and Bylaws.

​

​

​

​

​

​

(a)

Registrant’s Restated and Amended Articles of Incorporation were filed as Exhibit 3.1 to a Registrant’s Current Report 8-K (dated April 27, 2017) and the same is incorporated herein by reference.

​

​

​

​

​

​

(b)

Amended Bylaws was filed as Exhibit 3(b) to a Form 10-K, Annual Report for the year-ended December 31, 2016 (Commission file No.: 0-22684) and the same incorporated herein by reference.

​

​

​

​

4

​

Instruments Defining the Rights of Security Holders.

​

​

​

​

​

​

(a)

Specimen form of Stock Certificate for Common Stock was filed as Exhibit 4(a) to a Registration Statement on Form S-1 (No. 33-69474) and the same is incorporated herein by reference.

​

​

​

​

​

​

(b)

Description of Registrant’s Securities

​

​

​

​

10

​

Material Contracts.

​

​

​

​

​

​

(a)

Form of Indemnity Agreement entered into between the Registrant and each of its directors was filed as Exhibit 10(b) to a Registration Statement on Form S-1 (No. 33-69474) and the same is incorporated herein by reference.

​

​

​

​

​

​

*(b)

Performance Bonus Plan Summary Plan Description was filed as Exhibit 10(f) to a Form 10-K, Annual Report for the year ended December 25, 2010 (Commission file No.: 0-22684) and the same is incorporated herein by reference.

​

​

​

​

​

​

*(c)

Universal Forest Products, Inc. Deferred Compensation Plan as amended and restated effective June 1, 2011 was filed as Exhibit 10(g) to a Form 10-K, Annual Report for the year ended December 31, 2011 (Commission file No.: 0-22684) and the same is incorporated herein by reference.

​

​

​

​

​

​

*(d)

Executive Stock Grant Program was filed as Exhibit 10(h) to a Form 10-K, Annual Report for the year ended December 31, 2011 (Commission file No.: 0-22684) and the same is incorporated herein by reference.

​

​

​

​

​

​

(e)(2)

Credit Agreement dated November 1, 2018 was filed as Exhibit 10(i)(2) to a Form 8-K Current Report dated November 2, 2018 and the same is incorporated herein by reference.

​

​

​

​

​

​

(f)(1)

Note Purchase Agreement dated December 17, 2012 was filed as Exhibit 10(k) to a Form 8-K Current Report dated December 17, 2012 (Commission file No.: 0-22684) and the same is incorporated herein by reference.

​

​

​

​

​

​

(g)(2)

Note Purchase Agreements for Series C and D Senior Notes dated June 14, 2018, was filed as Exhibit 10(k)(2) to Registrant’s Form 10-K, Annual Report for the year ended December 29, 2018 (Commission file No.: 0-22684) and the same is incorporated herein by reference.

​

​

​

​

​

​

*(h)

Universal Forest Products, Inc. Employee Stock Purchase Plan is incorporated by reference from Appendix A to the Company’s proxy statement dated and filed with the Commission on March 9, 2018.

​

​

​

​

16

​

​

*(i)

Universal Forest Products, Inc. Director Retainer Stock Plan was filed as Exhibit 10(m) to a Form 10-K, Annual Report for the year ended December 31, 2016 (Commission file No.: 0-22684) and the same is incorporated herein by reference.

​

​

​

​

​

​

*(j)

Universal Forest Products, Inc. Amended and Restated Long Term Stock Incentive Plan is incorporated by reference from Appendix B to the Company’s proxy statement dated and filed with the Commission on March 9, 2018.

​

​

​

​

​

​

(k)

Note Purchase Agreement for Series E, F, and G dated August 11, 2020 was filed as Exhibit 10(k) to a form 10-K, Annual Report for the year ended December 26, 2020 (Commission file No.: 0-22684) and the same is incorporated herein by reference.

​

​

​

​

13

​

Selected portions of the Company’s Annual Report to Shareholders for the fiscal year ended December 25, 2021.

​

​

​

​

14

​

Code of Ethics for Senior Financial Officers.

​

​

​

​

​

​

(a)

Code of Ethics for Chief Financial Officer was filed as Exhibit 14(a) to a Form 10-K, Annual Report for the year ended December 25, 2010 and the same is incorporated herein by reference.

​

​

​

​

21

​

Subsidiaries of the Registrant.

​

​

​

​

23

​

Consent of Deloitte & Touche LLP.

​

​

​

​

31

​

Certifications.

​

​

​

​

​

​

(a)

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

​

​

​

​

​

​

(b)

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

​

​

​

​

32

​

Certifications.

​

​

​

​

​

​

(a)

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

​

​

​

​

​

​

(b)

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

​

​

​

​

101

​

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

​

​

​

​

​

​

(INS) XBRL Instance Document.

​

​

​

​

​

(SCH) XBRL Schema Document.

​

​

​

​

​

(CAL) XBRL Taxonomy Extension Calculation Linkbase Document.

​

​

​

​

​

(LAB) XBRL Taxonomy Extension Label Linkbase Document.

​

​

​

​

​

(PRE) XBRL Taxonomy Extension Presentation Linkbase Document.

​

​

​

​

​

(DEF) XBRL Taxonomy Extension Definition Linkbase Document.

​

​

​

104

​

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

17

*Indicates a compensatory arrangement.

18

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

​

​

​

Dated: February 23, 2022

UFP INDUSTRIES, INC.

​

​

​

​

By:

/s/ Matthew J. Missad

​

​

Matthew J. Missad,

​

​

Chief Executive Officer and

​

​

Principal Executive Officer

​

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on this 23rd day of February, 2022, by the following persons on behalf of us and in the capacities indicated.

​

​

​

​

By:

/s/ Matthew J. Missad

​

​

Matthew J. Missad,

​

​

Chief Executive Officer and

​

​

Principal Executive Officer

​

​

​

​

​

/s/ Michael R. Cole

​

​

Michael R. Cole,

​

​

Chief Financial Officer,

​

​

Principal Financial Officer and

​

​

Principal Accounting Officer

​

Each Director whose signature appears below hereby appoints Matthew J. Missad and Michael R. Cole, and each of them individually, as his or her attorney-in-fact to sign in his or her name and on his or her behalf as a Director, and to file with the Commission any and all amendments to this report on Form 10-K to the same extent and with the same effect as if done personally.

​

​

​

​

​

​

​

​

​

/s/ Joan A. Budden

​

/s/ William G. Currie

Joan A. Budden, Director

​

William G. Currie, Director

​

​

​

/s/ Benjamin J. McLean

​

/s/ Bruce A. Merino

Benjamin J. McLean, Director

​

Bruce A. Merino, Director

​

​

​

/s/ Matthew J. Missad

​

/s/ Thomas W. Rhodes

Matthew J. Missad, Director

​

Thomas W. Rhodes, Director

​

​

​

/s/ Mary Tuuk Karas

​

/s/ Brian C. Walker

Mary Tuuk Karas, Director

​

Brian C. Walker, Director

​

​

​

/s/ Michael G. Wooldridge

​

​

Michael G. Wooldridge, Director

​

​

​

​

​

19

Exhibit 4(b)

​

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF

THE SECURITIES EXCHANGE ACT OF 1934

​

The following is a brief description of the common stock of UFP Industries, Inc. (the “Company”). This summary does not purport to be complete in all respects and is subject to and qualified in its entirety by reference to the Company’s Restated and Amended Articles of Incorporation (the "Articles of Incorporation") and Amended Bylaws (the "Bylaws"), each of which are filed as exhibits to the Annual Report on Form 10-K of which this Exhibit 4(b) is a part.

​

Authorized Capital Stock

​

The Company’s authorized capital stock consists of 80,000,000 shares of common stock and 1,000,000 shares of preferred stock. As of December 25, 2021, there were no shares of preferred stock outstanding.

​

Dividend and Liquidation Rights

​

Subject to the prior rights of the holders of shares of preferred stock that may be issued and outstanding, if any, the holders of common stock are entitled to receive:

​

·

dividends when, as, and if declared by the Company’s Board of Directors out of funds legally available for the payment of dividends; and

​

·

in the event of dissolution of the Company, to share ratably in all assets remaining after payment of liabilities and satisfaction of the liquidation preferences, if any, of then outstanding shares of preferred stock, as provided in the Articles of Incorporation.

​

Voting Rights

​

Each holder of common stock is entitled to one vote for each share held of record on all matters presented to a vote at a shareholders meeting, including the election of directors. Holders of common stock have no cumulative voting rights.

​

The Company’s Articles of Incorporation provide that the Company’s Board of Directors be divided into three classes of nearly equal size, with the classes to hold office for staggered terms of three years each.

​

The vote required for the election of a director shall, except in a contested election, be the affirmative vote of a majority of the votes cast in the election of a nominee. For this purpose, a “majority of the votes cast” means that the number of votes cast “for” a director’s election exceeds the number of votes cast “against” that director’s election. Abstentions and broker non-votes are not counted as votes cast either “for” or “against” a director’s election. In a contested election, directors are elected by a plurality of the votes cast at the meeting of shareholders.

​

An election is considered contested if there are more nominees for election than positions on the Board of Directors to be filled by election at that meeting.

​

Listing

​

The Company’s common stock is currently traded on the Nasdaq Global Select Market under the symbol “ufpi.”

​

Applicable Anti-Takeover Provisions

​

The Company's Articles of Incorporation and Bylaws contain provisions that could also have an anti-takeover effect. Some of the provisions also may make it difficult for shareholders to replace incumbent directors with new directors who may be willing to entertain changes that shareholders may believe will lead to improvements in the combined company’s business.

​

Other

​

All of the outstanding shares of the Company’s common stock are fully paid and non-assessable. Holders of common stock have no preemptive rights to purchase or subscribe for any additional shares of common stock or other securities, and there are no conversion rights or redemption or sinking fund provisions with respect to the Company’s common stock.

​

The transfer agent for the Company’s common stock is American Stock Transfer & Trust Co., 6201 15th Avenue, Brooklyn, NY 11219.

0000000006120578061901851P6MP10YP10YP1YtrueP5YP1YP10YP1YP10YP1YP3YP5Y0

Table of Contents

Exhibit 13

UFP INDUSTRIES, INC.

FINANCIAL INFORMATION

Table of Contents

​

​

Selected Financial Data

2

​

​

Management’s Discussion and Analysis of Financial Condition and Results of Operations

3

​

​

Report of Independent Registered Public Accounting Firm – Opinion on Internal Control over Financial Reporting (PCAOB ID 34)

22

​

​

Report of Independent Registered Public Accounting Firm – Opinion on the Financial Statements (PCAOB ID 34)

23

​

​

Consolidated Balance Sheets as of December 25, 2021 and December 26, 2020

25

​

​

Consolidated Statements of Earnings and Comprehensive Income for the Years Ended December 25, 2021, December 26, 2020, and December 28, 2019

26

​

​

Consolidated Statements of Shareholders’ Equity for the Years Ended December 25, 2021, December 26, 2020, and December 28, 2019

27

​

​

Consolidated Statements of Cash Flows for the Years Ended December 25, 2021, December 26, 2020, and December 28, 2019

28

​

​

Notes to Consolidated Financial Statements

29

​

​

Market Information for our Common Stock

55

​

​

Stock Performance Graph

55

​

​

Directors and Executive Officers

56

​

​

Shareholder Information

57

​

​

​

​

​

Table of Contents

SELECTED FINANCIAL DATA

(In thousands, except per share and statistics data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

2021

    

2020

    

​

2019

    

​

2018

    

​

2017

 

Consolidated Statement of Earnings Data

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

​

Net sales

​

$

8,636,134

​

$

5,153,998

​

$

4,416,009

​

$

4,489,180

​

$

3,941,182

​

Gross profit

​

 

1,406,967

​

 

800,296

​

 

685,518

​

 

592,894

​

 

542,826

​

Earnings from operations

​

​

737,554

​

​

345,826

​

​

244,906

​

​

207,263

​

​

181,469

​

Earnings before income taxes

​

 

726,336

​

 

340,983

​

 

240,674

​

 

197,853

​

 

176,007

​

Net earnings attributable to controlling interest

​

$

535,640

​

$

246,778

​

$

179,650

​

$

148,598

​

$

119,512

​

Diluted earnings per share

​

$

8.59

​

$

4.00

​

$

2.91

​

$

2.40

​

$

1.94

​

Dividends per share

​

$

0.65

​

$

0.50

​

$

0.40

​

$

0.36

​

$

0.32

​

Consolidated Balance Sheet Data

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

Working capital(1)

​

$

1,297,434

​

$

1,074,613

​

$

739,030

​

$

685,108

​

$

560,241

​

Cash and cash equivalents

​

​

286,662

​

​

436,507

​

​

168,336

​

​

27,316

​

​

28,339

​

Total assets

​

 

3,245,271

​

 

2,404,891

​

 

1,889,477

​

 

1,647,548

​

 

1,464,677

​

Total debt

​

 

320,250

​

 

311,707

​

 

163,683

​

 

202,278

​

 

146,003

​

Shareholders’ equity

​

 

2,016,569

​

 

1,483,152

​

 

1,257,733

​

 

1,088,684

​

 

974,023

​

Statistics

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

Gross profit as a percentage of net sales

​

 

16.3

%  

 

15.5

%  

 

15.5

%  

 

13.2

%  

 

13.8

%

Net earnings attributable to controlling interest as a percentage of net sales

​

 

6.2

%  

 

4.8

%  

 

4.1

%  

 

3.3

%  

 

3.0

%

Return on beginning equity(2)

​

 

36.1

%  

 

19.6

%  

 

16.5

%  

 

15.3

%  

 

13.9

%

Current ratio(4)

​

 

2.67

​

 

3.32

​

 

3.09

​

 

3.21

​

 

2.85

​

Debt to equity ratio(5)

​

 

0.16

​

 

0.21

​

 

0.13

​

 

0.19

​

 

0.15

​

Book value per common share(3)

​

$

32.58

​

$

24.23

​

$

20.48

​

$

17.88

​

$

15.92

​

(1)

Current assets less current liabilities.

(2)

Net earnings attributable to controlling interest divided by beginning shareholders’ equity.

(3)

Shareholders’ equity divided by common stock outstanding.

(4)

Current assets divided by current liabilities.

(5)

Total debt divided by shareholders’ equity.

​

Acquisition growth is one of the primary contributing factors to material increases over the period from 2017 to 2021. Refer to Note C under the “Notes to the Consolidated Financial Statements” for further discussion on our business combinations and impact on our financial statements for the three years ended December 25, 2021.

​

​

2

Table of Contents

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 design, manufacture, and supply products made from wood, wood and non-wood composites, and other materials to three markets: retail, industrial, and construction. We are headquartered in Grand Rapids, Mich. For more information about UFP Industries, Inc., or its affiliated operations, go to www.ufpi.com.

This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. We do not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in 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, the COVID-19 pandemic (“pandemic”); 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 our reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission. We are pleased to present this overview of 2021.

OVERVIEW

Our results for 2021 were impacted by the following:

●Our net sales increased 68% in 2021 due to a 40% increase in our overall selling prices (see “Historical Lumber Prices”), a 24% increase in unit sales due to acquired businesses, and a 4% increase in organic unit sales. Organic unit growth of 14% and 5% in our construction and industrial segments, respectively, was offset by an organic unit decline of 4% in our retail segment.
●Earnings from operations increased 113.3% to $737.6 million. This increase resulted from a variety of factors including strong demand in our industrial and construction segments and leveraging our fixed costs, increased sales of value-added and new products that have higher margins, and increased selling prices as we improve our ability to execute value-based pricing initiatives. Acquisitions contributed approximately $50.5 million to our increase in operating profits. Excluding the impact of acquisitions, we estimate that value-added products contributed $367.1 million to the increase in gross profits and commodity-based products contributed $139.2 million.
●Our cash flows provided by operations in 2021 was $512.5 million compared to $336.5 million in 2020. This increase is due primarily to an increase in our net earnings and non-cash expenses of $316.0 million, offset by an increase in our investment in net working capital of $140.0 million compared to the prior period. The increase in net working capital was due to higher year over year lumber prices, as noted in the tables below, as well as increased demand in our industrial and construction segments. PalletOne and other acquisitions also contributed to the increase in our net working capital.
●We invested $151.2 million in capital expenditures to support and grow our business and invested $476.0 million in acquired businesses.
●We returned $40.2 million to our shareholders through dividends.

3

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

●Our net debt (debt and cash overdraft less cash) at the end of 2021 was $50.6 million compared to net cash of $124.8 million at the end of 2020.
●Our available borrowing capacity under revolving credit facilities and cash surplus resulted in total liquidity of approximately $805 million at the end of December 2021.

HISTORICAL LUMBER PRICES

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

​

October

​

​

520

​

​

826

​

November

​

​

585

​

​

571

​

December

​

​

746

​

​

643

​

​

​

​

​

​

​

​

​

Year-to-date average

​

$

844

​

$

552

​

Year-to-date percentage change

​

 

52.9

% 

 

55.5

%

​

4

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In addition, a Southern Yellow Pine (“SYP”) composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately 57% and 62% of total lumber purchases, excluding plywood and other panel products, for 2021 and 2020, respectively.

​

​

​

​

​

​

​

​

​

​

Southern Yellow Pine

 

​

​

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

​

October

​

​

512

​

​

711

​

November

​

​

599

​

​

508

​

December

​

​

675

​

​

565

​

​

​

​

​

​

​

​

​

Year-to-date average

​

$

755

​

$

520

​

Year-to-date percentage change

​

​

45.2

%

​

42.1

%

​

IMPACT OF THE LUMBER MARKET ON OUR OPERATING RESULTS

We experience significant fluctuations in the cost of commodity lumber products from primary producers ("Lumber Market"). 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, including plywood and other panel products, were 47.7% and 51.0% of our net sales in 2021 and 2020, respectively.

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

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

●Products with fixed selling prices. These products include value-added products such as decking and fencing sold to retail building materials customers, as well as trusses, wall panels and other components sold to the residential construction market, and most industrial packaging and other manufactured products for industrial users. Prices for these products are generally fixed at the time of the sales quotation for a specified period of time or are based upon a specific quantity. In order to maintain margins and reduce any exposure to adverse trends in the price of component lumber products, we attempt to lock in costs with our suppliers for these sales commitments. Also, the time period and quantity limitations allow us to eventually re-price our products for changes in lumber prices from our suppliers. In 2021, strong demand and unusually high lumber market volatility has allowed us to re-price these products more frequently to protect margins.

5

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

●Products with selling prices indexed to the reported Lumber Market with a fixed dollar "adder" to cover conversion costs and profits. These products primarily include treated lumber, remanufactured lumber, 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 profitability. In other words, for these products, our margins are exposed to changes in the trend of lumber prices.  We believe our sales of these products are at their highest relative level in our second quarter, primarily due to treated lumber sold to the retail market.

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 comprises approximately 16% of our total sales. This exposure is less significant with remanufactured lumber, trusses sold to the manufactured housing market, and other similar products, due to our higher rate of inventory turnover of these products. We attempt to mitigate the risk associated with treated lumber through vendor consignment inventory programs. (Please refer to the “Risk Factors” section of our annual report on form 10-K, filed with the United States Securities and Exchange Commission.)
●Products with fixed selling prices sold under long-term supply arrangements, particularly those involving multi-family construction projects. We attempt to mitigate this risk through our purchasing practices by locking in costs or including re-pricing triggers with customers if lumber prices change in excess of an agreed upon percentage.

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. As a result of this factor, we believe it is useful to compare our change in units sold with our change in gross profits, selling, general, and administrative expenses, and operating profits as presented in the following table.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended

​

    

December 25,

​

December 26,

​

    

2021

    

2020

Units sold

 

28.0

%  

​

6.0

%  

Gross profit

​

75.8

​

​

16.7

​

Selling, general, and administrative expenses

​

53.5

​

​

1.3

​

Earnings from operations

​

113.3

​

​

41.2

​

6

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

It is our goal to increase our gross profits and earnings from operations at a rate of growth that exceeds our unit sales growth, or in other words, increasing our profitability per unit sold.  We also have a long-term goal of improving our efficiencies and leveraging the fixed costs in our selling, general, and administrative expenses as we grow, which will result in a rate of growth of these expenses which is less than our unit sales growth and a lower cost per unit.

BUSINESS COMBINATIONS AND ASSET PURCHASES

We completed nine business acquisitions during 2021 and five during 2020. The annual historical sales attributable to acquisitions in 2021 and 2020 were approximately $1.3 billion and $101 million, respectively. These business combinations were not significant to our operating results individually or in aggregate; consequently pro forma results for 2021 and 2020 are not presented.

On December 27, 2021, we closed on an agreement to purchase 100 percent of the equity of Ultra Aluminum Manufacturing, Inc. (Ultra) located in Howell, Michigan for approximately $26.8 million. Ultra designs and produces an extensive selection of ornamental aluminum fence and railing products for contractors, landscapers, fence dealers and wholesalers.

See Notes to Consolidated Financial Statements, Note C, "Business Combinations" and Note O, “Subsequent Events” for additional information.

RESULTS OF OPERATIONS

The following table presents, for the periods indicated, the components of our Consolidated Statements of Earnings as a percentage of net sales. See “Impact of the Lumber Market on our Operating Results”.

​

​

​

​

​

​

Year Ended

​

December 25,

    

December 26,

    

​

2021

 

2020

 

Net sales

100.0

%

100.0

%  

Cost of goods sold

83.7

 

84.5

 

Gross profit

16.3

 

15.5

 

Selling, general, and administrative expenses

7.9

 

8.6

 

Other (gains) losses, net

(0.1)

 

0.2

 

Earnings from operations

8.5

 

6.7

 

Other expense, net

0.1

 

0.1

 

Earnings before income taxes

8.4

 

6.6

 

Income taxes

2.0

 

1.7

 

Net earnings

6.4

 

4.9

 

Less net earnings attributable to noncontrolling interest

(0.2)

 

(0.1)

 

Net earnings attributable to controlling interest

6.2

%

4.8

%  

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

7

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended

​

​

    

December 25,

​

    

December 26,

​

​

 

2021

​

 

2020

Gross profit

​

$

1,406,967

​

$

800,296

Selling, general, and administrative expenses

​

$

682,253

​

$

444,596

SG&A as percentage of gross profit

​

 

48.5%

​

 

55.6%

​

OPERATING RESULTS BY SEGMENT

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

The following tables present our operating results by segment for December 25, 2021 and December 26, 2020.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 25, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Retail

​

Industrial

​

Construction

​

All Other

​

Corporate

​

Total

Net sales

​

$

3,418,337

​

$

2,148,142

​

$

2,698,434

​

$

362,473

​

$

8,748

​

$

8,636,134

Cost of goods sold

​

 

3,120,634

​

 

1,683,466

​

 

2,167,405

​

​

237,696

​

​

19,966

​

​

7,229,167

Gross profit

​

​

297,703

​

​

464,676

​

​

531,029

​

​

124,777

​

​

(11,218)

​

​

1,406,967

Selling, general, administrative expenses

​

​

169,033

​

​

200,194

​

​

267,292

​

​

52,204

​

​

(6,470)

​

​

682,253

Other

​

​

(94)

​

​

(456)

​

​

(493)

​

​

(2,237)

​

​

(9,560)

​

​

(12,840)

Earnings from operations

​

$

128,764

​

$

264,938

​

$

264,230

​

$

74,810

​

$

4,812

​

$

737,554

​

8

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 26, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Retail

​

Industrial

​

Construction

​

All Other

​

Corporate

​

Total

Net sales

​

$

2,167,122

​

$

1,072,117

​

$

1,695,684

​

$

217,094

​

$

1,981

​

$

5,153,998

Cost of goods sold

​

 

1,874,114

​

 

895,466

​

 

1,433,469

​

​

147,117

​

​

3,536

​

​

4,353,702

Gross profit

​

​

293,008

​

​

176,651

​

​

262,215

​

​

69,977

​

​

(1,555)

​

​

800,296

Selling, general, administrative expenses

​

​

137,641

​

​

97,146

​

​

179,516

​

​

34,471

​

​

(4,178)

​

​

444,596

Other

​

​

56

​

​

(3,873)

​

​

13,690

​

​

775

​

​

(774)

​

​

9,874

Earnings from operations

​

$

155,311

​

$

83,378

​

$

69,009

​

$

34,731

​

$

3,397

​

$

345,826

​

The following tables present the components of our operating results as a percentage of net sales by segment for December 25, 2021 and December 26, 2020.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 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

​

91.3

​

78.4

​

80.3

​

65.6

​

—

​

83.7

​

Gross profit

​

8.7

​

21.6

​

19.7

​

34.4

​

—

​

16.3

​

Selling, general, administrative expenses

​

4.9

​

9.3

​

9.9

​

14.4

​

—

​

7.9

​

Other

​

(0.1)

​

—

​

—

​

(0.6)

​

—

​

(0.1)

​

Earnings from operations

​

3.8

%

12.3

%

9.8

%

20.6

%

—

​

8.5

%

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 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

​

86.5

​

83.5

​

84.5

​

67.8

​

—

​

84.5

​

Gross profit

​

13.5

​

16.5

​

15.5

​

32.2

​

—

​

15.5

​

Selling, general, administrative expenses

​

6.4

​

9.1

​

10.6

​

15.9

​

—

​

8.6

​

Other

​

—

​

(0.4)

​

0.8

​

0.4

​

—

​

0.2

​

Earnings from operations

​

7.2

%

7.8

%

4.1

%

16.0

%

—

​

6.7

%

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

9

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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; roof trusses, structural lumber and panels, and other products for the manufactured housing industry; engineered wood components for residential and commercial construction, customized interior fixtures, millwork, and casework used in a variety of retail, commercial and other structures; and structural wood packaging, other packing materials, and OEM components for various industries. Our strategic long-term sales objectives include:

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

% Change

​

    

in Sales

    

in Selling 
Prices

    

in Units

    

Acquisition Unit Change

    

Organic Unit Change

    

2021 versus 2020

​

67.6

%  

39.6

%  

28.0

%  

24.0

%  

4.0

%  

2020 versus 2019

​

16.7

%  

10.7

%  

6.0

%  

1.0

%  

5.0

%  

​

●Diversifying our end market sales mix by increasing sales of specialty 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, 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.
●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 segment, 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, metals 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.

10

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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, and All Other and Corporate).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 25, 2021

​

Year Ended December 26, 2020

​

​

    

Value-Added

    

Commodity-Based

​

Value-Added

    

Commodity-Based

    

Retail

 

43.2

%

​

56.8

%

​

53.8

%

​

46.2

%

​

Industrial

​

67.7

%

​

32.3

%

​

64.7

%

​

35.3

%

​

Construction

​

73.0

%

​

27.0

%

​

76.3

%

​

23.7

%

​

All Other and Corporate

​

74.9

%

​

25.1

%

​

75.6

%

​

24.4

%

​

Total Sales

​

59.7

%

​

40.3

%

​

64.3

%

​

35.7

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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 reflected in the table above is primarily due to the impact of higher average lumber prices in 2021 on sales of commodity-based products and the product mix of recently acquired businesses. Selling prices of commodity-based products are generally indexed to the current Lumber Market at the time they are shipped, and lumber costs comprise a 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 23% in 2021 compared to 2020, including a 16% contribution from acquisitions and 7% organic growth. Our unit sales of commodity-based products increased approximately 37%, due primarily from the acquisition of Sunbelt and Spartanburg.

●Developing new products. We define new products as those that will generate sales of at least $1 million per year within 4 years of launch and are still growing and gaining market penetration. Our goal was to achieve annual new product sales of at least $575 million in 2021. New product sales and gross profits in 2021 were up 56% and 47%, respectively, from the prior year. Acquisitions contributed approximately $48 million to new product sales in 2021. Approximately $13 million of new product sales for 2020, while still sold, were sunset in 2021 and excluded from the table below because they no longer meet the definition above. The table below presents new product sales in thousands.

​

​

​

​

​

​

​

​

​

​

​

​

New Product Sales by Segment

​

​

Year Ended

​

    

December 25,

    

December 26,

    

%

​

​

2021

​

2020

​

Change

Retail

​

$

510,266

​

$

401,539

​

27.1

%

Industrial

​

 

177,214

​

 

72,574

​

144.2

%

Construction

​

​

135,644

​

​

54,060

​

150.9

%

All Other and Corporate

​

 

18,735

​

 

11,451

​

63.6

%

Total New Product Sales

​

$

841,859

​

$

539,624

​

56.0

%

​

​

​

​

​

​

​

​

​

​

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.

​

11

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Retail Segment:

Net sales to the retail segment increased 58% in 2021 compared to 2020 due to a 27% increase in selling prices and a 35% increase in unit sales from acquired operations, offset by a 4% decrease in organic unit sales. Organic unit increases of 17% of UFP Edge, 9% of Deckorators, and 5% of Outdoor Essentials, were offset by organic unit declines of 15% of ProWood and 12% of Handprint. The organic increases mentioned above were primarily due to capacity expansion and initiatives to gain market share in these product categories, while the decline in unit sales of ProWood and Handprint are attributed to a shift in consumer spending as a result of the end of pandemic-related restrictions on certain activities. In addition, new product sales increased approximately 27.1% to $510 million in 2021 compared to 2020, and the transfer of approximately $48 million in sales to the retail segment from the construction segment contributed to unit growth in retail. Finally, our sales to big box customers increased 53%, and sales to other independent retailers increased 67%.

​

Gross profits increased 1.6% to $298 million in 2021 compared to 2020. Our change in gross profits was attributable to the following:

●Our Retail Building Materials business unit contributed $23.2 million to the increase. The increase is primarily due to unit sales growth and rising lumber and panel prices combined with effective inventory positioning.
●Acquisitions contributed $10.4 million to the increase.
●Our UFP Edge business unit decreased by approximately $5.6 million.
●Our Deckorators, Outdoor Essentials, Handprint, and E-Commerce business units were less significant, and collectively these units contributed $2.5 million of additional gross profit.
●Our ProWood business unit decreased by $25.8 million, primarily due to the impact of falling lumber prices from June through October of 2021 on ProWood’s pressure-treated products that are sold at a variable price. Conversely, lumber prices rose during most of 2020 as a result of unexpectedly strong demand.

Selling, general and administrative (“SG&A”) expenses increased by approximately $31.4 million, or 22.8%, in 2021 compared to 2020. The SG&A of recently acquired businesses contributed approximately $19.2 million to this increase. Accrued bonus expense, which varies with our overall profitability and return on investment, decreased approximately $0.6 million and totaled approximately $34.7 million in 2021. The remaining increase was primarily due to increases in salaries and wages, sales compensation, and travel related expenses, which were partially offset by a decline in merchandising costs.

Earnings from operations of the Retail reportable segment decreased in 2021 compared to 2020 by $26.5 million, or 17.1%, as a result of the factors mentioned above.

Industrial Segment:

Net sales to the industrial segment increased 100% in 2021 compared to 2020 due to a 60% increase in selling prices attributable to the Lumber Market and favorable sales mix changes, a 5% increase in organic unit sales and a 35% increase in unit sales from recent acquisitions.

​

12

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Gross profits increased by $288.0 million, or 163%, to $464.7 million in 2021 compared to 2020.  Acquisitions contributed $81.0 million to the increase in gross profit. The remaining increase was primarily due to organic unit sales growth and leveraging fixed costs, value-based pricing initiatives resulting in an increase in our selling prices, and favorable changes in our sales mix of value-added products. Additionally, in 2021, strong demand and unusually high lumber market volatility has allowed us to re-price our products more frequently to protect margins.

Selling, general and administrative (“SG&A”) expenses increased by approximately $103.0 million, or 106.1%, in 2021 compared to 2020. Acquired operations in 2021 contributed approximately $23.0 million to total SG&A expenses. Accrued bonus expense increased approximately $52.3 million compared to last year and totaled approximately $71.1 million for 2021. The remaining increase was primarily due to increases in salaries and wages and sales incentive compensation.

Earnings from operations of the Industrial reportable segment in 2021 increased by $181.6 million, or 217.8%, compared to 2020 due to the factors discussed above.

Construction Segment:

Net sales to the construction segment increased 59% in 2021 compared to 2020 due to a 42% increase in selling prices, organic unit sales growth of 14%, and 3% growth from acquisitions. The organic unit increase was comprised of a 25% increase in factory-built housing, a 15% in site-built housing, and a 15% in commercial construction. These increases were offset by a unit decline of 30% in concrete forming. As discussed above, the transfer of $48 million in sales to the retail segment contributed to the unit decline in the concrete forming business unit.

​

Gross profits increased by $268.8 million, or 102.5% to $531.0 million in 2021 compared to 2020. The increase in our gross profit was comprised of the following factors:

●Our site-built housing business unit increased by $157.4 million due to unit sales growth and leveraging fixed costs and higher selling prices. Additionally, in 2021, strong demand and unusually high lumber market volatility has allowed us to re-price our products more frequently to protect margins.
●Our factory-built housing business unit increased by $79.8 million as a result of increased unit sales and leveraging fixed costs and favorable trends in lumber prices. Commodity-based and value-added products increased $34 million and $39 million, respectively.
●Our commercial business unit increased $19.1 million as a result of an increase in unit sales, better productivity due to efforts to reduce our capacity to align with the current level of demand, increases in selling prices, and other operational improvements.
●Acquired businesses contributed $6.3 million.
●Our concrete forming business unit increased $6.2 million.

SG&A expenses increased by approximately $87.8 million, or 48.9%, in 2021 compared to 2020. Acquired operations in 2021 contributed approximately $5.8 million to total SG&A expenses. Accrued bonus expense increased approximately $52.2 million compared to last year and totaled approximately $70.8 million for 2021. The remaining increase was primarily due to the $11.5 million Goodwill impairment in the prior year and increases in salaries and wages, sales incentive compensation, and travel related expenses in the current year.

Earnings from operations of the Construction reportable segment increased in 2021 compared to 2020 by $195.2 million, or 282.9%, due to the factors mentioned above.

13

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All Other Segment:

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

Corporate:

The corporate segment primarily consists of net sales and gross profits on sales to external customers initiated by UFP Purchasing and UFP Transportation and over (under) allocated costs that are not significant

INTEREST EXPENSE

Interest expense increased in 2021 compared to 2020, due primarily to an increase in borrowings to fund current year acquisitions and increases in net working capital.  See “Note C of Notes to the Consolidated Financial Statements”.

INCOME TAXES

Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for state and local income taxes, and permanent tax differences. Our effective tax rate was 23.9% in 2021 compared to 25.5% in 2020. The decrease was primarily due to a reduction in certain permanent tax differences compared to the prior year, none of which are individually significant, non-deductible goodwill impairment expense recorded in 2020, and a valuation allowance recorded in 2020 against deferred tax assets related to net operating loss carryforwards of foreign subsidiaries in our commercial business unit totaling approximately $3.6 million.

OFF-BALANCE SHEET COMMITMENTS AND CONTRACTUAL OBLIGATIONS

We have no significant off-balance sheet commitments. The following table summarizes our contractual obligations as of December 25, 2021 (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Payments Due by Period

​

    

Less than

    

1 – 3

    

3 – 5

    

After

    

​

​

Contractual Obligation

​

1 Year

​

Years

​

Years

​

5 Years

​

Total

Long-term debt and finance lease obligations

​

$

42,649

​

$

49,048

​

$

285

​

$

228,268

​

$

320,250

Estimated interest on long-term debt and finance lease obligations

​

 

11,214

​

 

18,959

​

 

15,657

​

 

41,064

​

 

86,894

Operating leases

​

 

26,378

​

 

36,882

​

 

24,304

​

 

27,123

​

 

114,687

Capital project purchase obligations

​

 

78,234

​

 

—

​

 

—

​

 

—

​

 

78,234

Total

​

$

158,475

​

$

104,889

​

$

40,246

​

$

296,455

​

$

600,065

​

As of December 25, 2021, we also had $54.2 million in outstanding letters of credit issued during the normal course of business, as required by some vendor contracts.

14

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

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

​

​

​

​

​

​

​

​

​

​

December 25,

​

December 26,

​

​

    

2021

    

2020

    

Cash from operating activities

 

$

512,477

 

$

336,477

 

Cash used in investing activities

 

​

(611,187)

 

​

(154,718)

 

Cash from (used in) financing activities

 

​

(45,006)

 

​

85,221

 

Effect of exchange rate changes on cash

 

​

(1,669)

 

​

962

 

Net change in cash and cash equivalents

 

​

(145,385)

 

​

267,942

 

Cash, cash equivalents, and restricted cash, beginning of year

 

​

436,608

 

​

168,666

 

Cash, cash equivalents, and restricted cash, end of year

​

$

291,223

​

$

436,608

​

​

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 these financial ratios are among many other important factors to maintaining a strong credit profile, which in turn helps ensure timely access to capital when needed.

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

Due to the seasonality of our business and the effects of the Lumber Market, we believe our cash cycle (days sales are outstanding plus days supply of inventory less days payables are outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle increased to 57 days in 2021 from 48 days in 2020.

​

​

​

​

​

​

​

​

​

Twelve Months Ended

​

​

December 25,

​

December 26,

​

​

2021

​

2020

Days of sales outstanding

    

​

34

    

​

32

Days supply of inventory

​

 

43

​

 

36

Days payables outstanding

​

 

(20)

​

 

(20)

Days in cash cycle

​

 

57

​

 

48

​

The increase in our days of sales outstanding and days supply of inventory in 2021 was primarily due to PalletOne and other acquisitions. Lower retail demand than our customers anticipated from our inventory planning also contributed to our days supply of inventory.

15

Table of Contents

UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our cash flows from operating activities in 2021 was $512.5 million, which was comprised of net earnings of $552.4 million and $114.8 million of non-cash expenses, offset by a $12.0 million gain on sale of assets and $142.7 million increase in working capital since the end of December 2020. The increase in our working capital was due to higher year over year lumber prices and increased demand in our industrial and construction segments. Comparatively, cash generated from operating activities was approximately $336.5 million in 2020, which was comprised of net earnings of $253.9 million, $85.3 million of non-cash expenses (including $11.5 million of goodwill impairment charges), and a $2.7 million increase in working capital since the end of December 2019.  

Our cash used in investing activities during 2021 was $611.2 million, reflecting purchases of property, plant, and equipment totaling $151.2 million and business acquisitions totaling $476.0 million. See “Note C of Notes to the Consolidated Financial Statements”. Our outstanding purchase commitments on existing capital projects totaled approximately $52.7 million on December 25, 2021. 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. 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,
●Expand our capacity to produce UFP Edge siding, pattern and trim products, machine-built pallets, engineered wood and metal components for site-built construction, and
●Invest in automation opportunities.

Finally, we sold property, plants, and equipment for proceeds of $30.0 million, consisting of $21 million from the sale of real estate and $9 million from the sale of equipment. The sale and purchase of investments totaling $14.9 million and $23.8 million, respectively, are due to investment activity in our captive insurance subsidiary.

Cash flows used in financing activities during 2021 primarily consisted of the payment of quarterly dividends totaling $40.2 million and distributions to noncontrolling interests of $6.8 million. Comparatively in 2020, cash flows from financing activities primarily consisted of proceeds of $150.0 million from the issuance of Senior E, F and G Notes in order to take advantage of lower interest rates, $30.7 million in dividend payments, and $29.2 million in share repurchases when our stock price declined as a result of the pandemic. The increase in our dividends is primarily due to an increase in the rates our board approved as a result of our growth in earnings and operating cash flow.

On November 1, 2018, we entered into a five-year, $375 million unsecured revolving credit facility with a syndicate of U.S. and Canadian banks led by JPMorgan Chase Bank, N.A., as administrative agent and Wells Fargo Bank, N.A., as syndication agent.  The facilities include up to $40 million which may be advanced in the form of letters of credit, and up to $100 million (U.S. dollar equivalent) which may be advanced in Canadian dollars, Australian dollars, pounds Sterling, Euros and such other foreign currencies as may subsequently be agreed upon among the parties. On February 19, 2021, the credit agreement was amended to increase the availability from $375 million to $550 million by exercising the accordion feature in the original agreement.

On August 10, 2020, we entered into an unsecured Note Purchase Agreement (the "Agreement") under which we issued our 3.04% Series 2020 E Senior Notes, due August 10, 2032, in the aggregate principal amount of $50 million, our 3.08% Series 2020 F Senior Notes, due August 10, 2033, in the aggregate principal amount of $50 million, and our 3.15% Series 2020 G Senior Notes, due August 10, 2035, in the aggregate principal amount of $50 million. Proceeds from the sale of the Series E, F and G Senior Notes were used to fund the acquisition of PalletOne.

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UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

On December 25, 2021, we had $7.8 million outstanding on our $550 million revolving credit facility, and we had approximately $535.1 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 December 25, 2021.

ENVIRONMENTAL CONSIDERATIONS AND REGULATIONS

See Notes to Consolidated Financial Statements, Note L, “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. Following is a summary of our more significant accounting policies that require the use of estimates and judgments in preparing the financial statements.

GOODWILL

We evaluate goodwill for indicators of impairment when events or circumstances indicate that this risk may be present. Our judgments regarding the existence of impairment are based on market conditions, operational performance and estimated future cash flows. Determining whether an impairment has occurred requires the valuation of the respective reporting unit, which we have consistently estimated using primarily a weighted average between income and market valuation approaches. We believe this approach is the most appropriate and accurate method to measure the fair value of our intangible assets. We use discounted cash flow analysis with the following assumption:  a business is worth today what it can generate in future cash flows; cash received today is worth more than an equal amount of cash received in the future; and future cash flows can be reasonably estimated. The discounted cash flow analysis is based on the present value of projected cash flows and residual values.

If the carrying value of goodwill is considered impaired, an impairment charge is recorded to adjust it to its fair value. Changes in forecasted operations and changes in discount rates can materially affect these estimates. In addition, we test goodwill annually for impairment or more frequently if changes in circumstances or the occurrence of other events suggest impairments exist. The test for impairment requires us to make several estimates about fair value, most of which are based on projected future cash flows and market valuation multiples. Changes in these estimates may result in the recognition of an impairment loss.

On our annual testing date of September 25, 2021, the fair values exceed the carrying values for each of the Company’s reporting units. There were no indicators for impairment for any of the reporting units. We believe we have sufficient available information, both current and historical, to support our assumptions, judgments and estimates used in the goodwill impairment test.

In the prior year, we experienced significantly lower than expected operating results within our commercial reporting unit, which is within the Construction segment.  It was determined that the carrying value of the reporting unit exceeded its fair value and we recorded a non-cash goodwill impairment charge of $11.5 million as of  December 26, 2020, which represented the entire amount of the goodwill recorded within the reporting unit, as a result.

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UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

REVENUE RECOGNITION

Revenue for product sales is recognized at the time the performance obligation is satisfied, which is primarily when the goods are delivered to the carrier, Free On Board (FOB) shipping point.  Generally, title 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.

Performance on construction contracts is reflected in operations using over time accounting, under either the cost to cost or units of delivery methods, depending on the nature of the business at individual operations. 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 related 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 related to the total number of units. Revisions in earnings estimates on the construction contracts are recorded in the accounting period in which the basis for such revisions becomes known. Projected losses on individual contracts are charged to operations in their entirety when such losses become apparent.

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

FORWARD OUTLOOK

GOALS

Our long-term objectives include:

●Growing our annual unit sales by 5 to 7 percent. We anticipate smaller tuck-in acquisitions will contribute toward this goal;
●Achieving and sustaining a 10 percent EBITDA margin by continuing to enhance our capabilities and grow our portfolio of value-added products as well as growth of our portfolio of value-added products;
●Earning an incremental return on new investment over our cost of capital, and;
●Maintaining a conservative capital structure.

​

RETAIL SEGMENT

The Home Improvement Research Institute (“HIRI”) anticipates growth in home improvement spending and has forecasted a 3.1% compounded annual growth rate through 2024. Most recently, large “big box” customers like The Home Depot and Lowes have cautioned that they cannot predict if pandemic driven demand trends will continue. The Home Depot has stated that if the demand environment during the last half of 2021 were to persist through the current year, it would imply slightly positive sales growth in 2022. Lowe’s has forecasted a decline of 1% to an increase of 1% in comparable sales in 2022. Sales of our Retail Solutions segment comprised approximately 39.6% of our annual sales in 2021.

We continue to compete for market share for certain retail customers and face intense pricing pressure from other suppliers to this market.

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UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our long-term goal is to achieve sales growth by:

●Increasing our market share of value-added products, including our Deckorators, Edge, Outdoor Essentials and Handprint product lines. Continued investment in capacity for Deckorators and Edge is expected to contribute to this increase.
●Developing new products and increasing our emphasis on product innovation and product differentiation in order to counter commoditization trends and influences.
●Acquiring businesses in core product categories when those opportunities exist.
●Adding new products and customers through strategic business acquisitions or alliances.

INDUSTRIAL SEGMENT

Our goal is to increase our sales of wood, wood alternative, and protective packaging products to a wide variety of industrial customers and manufactured wood components for OEM users. We believe the vast amount of hardwood and softwood lumber consumed for industrial applications, combined with the highly fragmented nature of this market, provides us with market share growth opportunities as a result of our competitive advantages in manufacturing, purchasing, and material utilization. In addition, purchasers of packaging products with a wide geographic footprint increasingly desire to reduce the number of suppliers they buy from, which provides an opportunity to gain market share due to our international presence.  We plan to continue to obtain market share by expanding our manufacturing capacity, enhancing our capabilities and product offerings to enhance the solutions we offer our customers, and improving our ability to serve large regional and international customers in targeted markets. We plan to continue to pursue acquisition opportunities that meet our strategic criteria and help us meet these objectives. As discussed previously, the recently implemented reorganization of our business is intended to promote revenue growth through the introduction of new products, including protective and other packaging materials, and enhanced expertise in this market as well as improved earnings through more efficient use of our people, resources and capital.

Market indicators that should be considered when evaluating future demand for our products in the industrial segment include industrial production and the Purchasing Managers Index. Industrial Production in the United States is estimated to stand at 0.9% in 2022. The Purchasing Managers Index is projected to trend around 56 points in 2023 and 52.4 points in 2024. Sales in this segment comprised approximately 24.9% of our annual sales in 2021.

CONSTRUCTION SEGMENT

The National Association of Home Builders forecasts a 3.0% increase in manufactured home shipments in 2022 followed by a 1.0% increase in 2023. We currently supply approximately 45.0% of the trusses used in manufactured housing and we will strive to maintain our market share of trusses produced for this market. Sales of our Factory Built business unit within our Construction segment comprised approximately 12.7% of our annual sales in 2021.

The Mortgage Bankers Association of America forecasts a 5.0% increase in national housing starts to an estimated 1.7 million starts in 2022. The National Association of Home Builders forecasts starts of $1.6 million, a 3.0% increase from 2021. We believe we are well-positioned to capture our share of any increase that may occur in housing starts in the regions we operate, which is primarily Texas, Colorado, the mid-Atlantic states, and the Northeast. However, due to our conservative approach to adding capacity to serve this market and focus on managing potential channel conflicts with certain customers, our growth may trail the market in future years. Sales of our Site Built business unit within our Construction segment comprised approximately 13.8% of our annual sales in 2021.

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UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Non-residential construction spending is a market indicator that should be considered when evaluating future demand for our products in our Commercial and Concrete Forming business units within our Construction segment. Sales in these business units comprised approximately 3.0% and 1.7%, respectively, of our annual sales in 2021.

GROSS PROFIT

We believe the following factors may impact our gross profits and margins in the future:

●End market demand and our ability to grow and leverage fixed costs and price our products based on the value we offer our customers.
●The effective implementation of our strategy to focus and manage our operations around the markets we serve.
●Our ability to maintain market share and gross margins on products sold to our largest customers. We believe our level of service, geographic diversity, and quality of products provides an added value to our customers. However, if our customers are unwilling to pay for these advantages, our sales and gross margins may be reduced.
●Sales mix of value-added and commodity products.
●Fluctuations in the relative level of the Lumber Market and trends in the market price of lumber. (See "Impact of the Lumber Market on our Operating Results.")
●Fuel and transportation costs.
●Rising labor and benefit costs.
●Our ability to continue to achieve productivity improvements as our unit sales increase and planned cost reductions through continuous improvement activities, automation, and other initiatives.
●Changes in corporate income tax rates and the cost of complying with new or increased government regulations.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

In recent years, selling, general and administrative (SG&A) expenses have increased due to acquisitions and added personnel hired to take advantage of growth opportunities and execute our initiatives intended to increase our sales of new products and improve our sales mix of value-added products. We anticipate our trend of increases in these costs will continue in 2022; however, our objective is to reduce these costs on a per unit basis and as a percentage of gross profits as we grow through the improved productivity of our people and as a result of fixed costs. In addition, bonus and other incentive expenses for all salaried and sales employees is based on our profitability and the effective management of our assets and will continue to fluctuate based on our results. See Note H — Common Stock for discussion of future compensation costs related to long-term share-based bonus awards.

On a long-term basis, we expect that our SG&A expenses will primarily be impacted by:

●Our growth in sales to the industrial and the construction segments.  Our sales to these segments require a higher ratio of SG&A costs due, in part, to product design and engineering requirements.

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UFP INDUSTRIES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

●Sales of new products and value-added, branded products to the retail segment, which generally require higher product development, marketing, advertising, and other selling costs.
●Our incentive compensation programs which are tied to gross profits, pre-bonus earnings from operations and return on investment.
●Our growth and success in achieving continuous improvement objectives designed to improve our productivity and leverage our fixed costs as we grow.

LIQUIDITY AND CAPITAL RESOURCES

Our cash cycle will continue to be impacted in the future by our mix of sales by market. Sales to our construction and industrial segments require a greater investment in working capital than sales to our retail segment. Additionally, our net investment in trade receivables, inventory, and accounts payable will continue to be impacted by the level of lumber prices.

Additionally, we expect to spend between $175 million to $225 million on capital expenditures, incur depreciation of approximately $98 million, and incur amortization and other non-cash expenses of approximately $20 million in 2022.

On December 25, 2021, we had outstanding purchase commitments on capital projects of approximately $52.7 million. We intend to fund capital expenditures and purchase commitments through our operating cash flows and availability under our revolving credit facility which is considered sufficient to meet these commitments and working capital needs.

Our dividend rates are reviewed and approved at each of our January, April, July, and October board meetings and payments are made in March, June, September, and December of each year. Our board considers our dividend yield, payout ratios relative to earnings and operating cash flow, and potential variability of future results, among other factors, as part of its decision-making process.

We have a share repurchase program approved by our Board of Directors, and as of February 15, 2022, we have remaining authorization to buy back approximately 2.6 million shares. In the past, we have repurchased shares in order to offset the effect of issuances resulting from our employee benefit plans and at opportune times when our stock price falls to predetermined levels.

​

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of UFP Industries, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of UFP Industries, Inc. and subsidiaries (the “Company”) as of December 25, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 25, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 25, 2021, of the Company and our report dated February 23, 2022, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Grand Rapids, Michigan   

February 23, 2022

​

​

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of UFP Industries, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of UFP Industries, Inc. and subsidiaries (the "Company") as of December 25, 2021 and December 26, 2020, the related consolidated statements of earnings and comprehensive income, shareholders' equity, and cash flows, for each of the three years in the period ended December 25, 2021, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 25, 2021 and December 26, 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 25, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 25, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Purchase Accounting for the PalletOne, Inc. Acquisition – Refer to C to the financial statements

Critical Audit Matter Description

On December 28, 2020, the Company acquired PalletOne, Inc. for $259 million. The transaction was accounted for using the purchase price method of accounting. The purchase price, including capitalized acquisition-related costs, was allocated based on the relative fair value of the assets acquired and liabilities assumed, which were determined using valuation information obtained from published market data, an external valuation specialist for certain acquired assets, and the Company’s historical knowledge of acquiring comparable assets and liabilities.

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We identified the acquisition of PalletOne, Inc. as a critical audit matter because of the estimates management makes to determine the relative fair value of the assets acquired and liabilities assumed. This required auditor judgement and an increased extent of audit effort, including the use of our fair value specialists for the valuation of the real, tangible, and intangible assets.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the relative fair value of the assets acquired and liabilities assumed of PalletOne, Inc. included the following, among others:

●We assessed the knowledge, skill, ability, and objectivity of management’s valuation group and evaluated the work performed.
●With the assistance of our fair valuation specialists, we evaluated the reasonableness of the (1) valuation methodology for the real, personal, and intangible property and (2) discount rate of the intangible property by:
-Testing the assumptions used considering the past performance of each acquired company and the Company’s strategic plan going forward.
-Testing the source information underlying the determination of the discount rate and testing the mathematical accuracy of the calculation.
-Developing a range of independent estimates of the discount rate and comparing to the discount rate utilized by management.
●Evaluated management’s use of experts related to the valuation of certain acquired assets including qualifications and methodology.

/s/ Deloitte & Touche LLP

Grand Rapids, Michigan  

February 23, 2022

​

We have served as the Company's auditor since 2014.

​

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UFP INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

​

​

​

​

​

​

​

​

(in thousands, except share data)

​

​

​

​

​

​

​

​

December 25,

​

December 26,

​

​

    

2021

    

2020

ASSETS

​

  

​

​

  

​

​

CURRENT ASSETS:

​

  

​

​

  

​

​

Cash and cash equivalents

​

    

$

286,662

  

$

436,507

Restricted cash

​

​

 

4,561

  

 

101

Investments

​

​

 

36,495

  

 

24,308

Accounts receivable, net

​

​

 

737,805

  

 

470,504

Inventories:

​

  

​

​

  

​

​

Raw materials

​

​

 

416,043

  

 

316,481

Finished goods

​

​

 

547,277

  

 

250,813

Total inventories

​

​

 

963,320

  

 

567,294

Refundable income taxes

​

​

 

4,806

  

 

5,836

Other current assets

​

​

 

39,827

  

 

33,812

TOTAL CURRENT ASSETS

​

​

 

2,073,476

​

 

1,538,362

DEFERRED INCOME TAXES

​

​

 

3,462

  

 

2,413

RESTRICTED INVESTMENTS

​

​

​

19,310

​

​

17,565

RIGHT OF USE ASSETS

​

​

​

96,703

​

​

77,245

OTHER ASSETS

​

​

 

31,876

  

 

20,298

GOODWILL

​

​

 

315,038

  

 

252,193

INDEFINITE-LIVED INTANGIBLE ASSETS

​

​

 

7,369

  

 

7,401

OTHER INTANGIBLE ASSETS, NET

​

​

 

109,017

  

 

72,252

PROPERTY, PLANT AND EQUIPMENT:

​

  

​

​

  

​

​

Land and improvements

​

​

​

163,289

​

​

128,301

Building and improvements

​

​

​

329,698

​

​

272,864

Machinery and equipment

​

​

​

632,864

​

​

525,542

Furniture and fixtures

​

​

​

24,063

​

​

21,110

Construction in progress

​

​

​

62,199

​

​

26,680

PROPERTY, PLANT AND EQUIPMENT, GROSS

​

​

 

1,212,113

  

 

974,497

Less accumulated depreciation and amortization

​

​

 

(623,093)

  

 

(557,335)

PROPERTY, PLANT AND EQUIPMENT, NET

​

​

​

589,020

​

​

417,162

TOTAL ASSETS

​

​

$

3,245,271

​

$

2,404,891

LIABILITIES AND SHAREHOLDERS’ EQUITY

​

  

​

​

  

​

​

CURRENT LIABILITIES:

​

  

​

​

  

​

​

Cash overdraft

​

​

$

17,030

  

$

—

Accounts payable

​

​

​

319,125

  

​

211,518

Accrued liabilities:

​

  

​

​

  

​

​

Compensation and benefits

​

​

 

289,196

  

 

166,478

Other

​

​

 

84,853

  

 

69,104

Current portion of lease liability

​

​

​

23,155

​

​

16,549

Current portion of long-term debt

​

​

 

42,683

  

 

100

TOTAL CURRENT LIABILITIES

​

​

 

776,042

  

 

463,749

LONG-TERM DEBT

​

​

 

277,567

  

 

311,607

LEASE LIABILITY

​

​

​

76,632

​

​

61,509

DEFERRED INCOME TAXES

​

​

 

60,964

  

 

25,266

OTHER LIABILITIES

​

​

 

37,497

  

 

59,608

TOTAL LIABILITIES

​

​

 

1,228,702

  

 

921,739

SHAREHOLDERS’ EQUITY:

​

  

​

​

  

​

​

Controlling interest shareholders’ equity:

​

  

​

​

  

​

​

Preferred stock, no par value; shares authorized 1,000,000; issued and outstanding, none

​

​

$

—

  

$

—

Common stock, $1 par value; shares authorized 80,000,000; issued and outstanding, 61,901,851 and 61,205,780

​

​

 

61,902

  

 

61,206

Additional paid-in capital

​

​

 

243,995

  

 

218,224

Retained earnings

​

​

 

1,678,121

  

 

1,182,680

Accumulated other comprehensive loss

​

​

 

(5,405)

  

 

(1,794)

Total controlling interest shareholders’ equity

​

​

 

1,978,613

  

 

1,460,316

Noncontrolling interest

​

​

 

37,956

  

 

22,836

TOTAL SHAREHOLDERS’ EQUITY

​

​

 

2,016,569

  

 

1,483,152

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

​

​

$

3,245,271

  

$

2,404,891

​

See notes to consolidated financial statements.

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UFP INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

​

​

​

​

​

​

​

​

​

​

(in thousands, except per share data)

​

​

​

​

​

​

​

​

Year Ended

​

​

December 25,

​

December 26,

​

December 28,

​

    

2021

    

2020

    

2019

NET SALES

    

$

8,636,134

  

$

5,153,998

  

$

4,416,009

COST OF GOODS SOLD

​

 

7,229,167

  

 

4,353,702

  

 

3,730,491

GROSS PROFIT

​

 

1,406,967

  

 

800,296

  

 

685,518

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

​

 

682,253

  

 

444,596

  

 

439,047

OTHER (GAINS) LOSSES, NET

​

​

(12,840)

​

​

9,874

​

​

1,565

EARNINGS FROM OPERATIONS

​

 

737,554

  

 

345,826

  

 

244,906

INTEREST EXPENSE

​

 

13,814

  

 

9,311

  

 

8,700

INTEREST AND INVESTMENT INCOME

​

 

(6,498)

  

 

(4,468)

  

 

(4,468)

EQUITY IN EARNINGS OF INVESTEE

​

​

3,902

​

​

—

​

​

—

​

​

 

11,218

  

 

4,843

  

 

4,232

EARNINGS BEFORE INCOME TAXES

​

 

726,336

  

 

340,983

  

 

240,674

INCOME TAXES

​

 

173,972

  

 

87,101

  

 

58,270

NET EARNINGS

​

 

552,364

  

 

253,882

  

 

182,404

LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST

​

 

(16,724)

  

 

(7,104)

  

 

(2,754)

NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST

​

$

535,640

  

$

246,778

  

$

179,650

​

​

​

​

​

​

​

​

​

​

EARNINGS PER SHARE – BASIC

​

$

8.61

  

$

4.00

  

$

2.91

EARNINGS PER SHARE – DILUTED

​

$

8.59

  

$

4.00

  

$

2.91

​

​

​

​

​

​

​

​

​

​

OTHER COMPREHENSIVE INCOME:

​

​

​

​

​

​

​

​

​

NET EARNINGS

​

 

552,364

  

 

253,882

  

 

182,404

OTHER COMPREHENSIVE GAIN (LOSS)

​

 

(5,296)

  

 

5,967

  

 

1,513

COMPREHENSIVE INCOME

​

 

547,068

  

 

259,849

  

 

183,917

LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST

​

 

(15,039)

  

 

(9,976)

  

 

(3,218)

COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST

​

$

532,029

  

$

249,873

  

$

180,699

​

See notes to consolidated financial statements.

​

26

Table of Contents

UFP INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(in thousands, except share and per share data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Controlling Interest Shareholders’ Equity

​

​

​

​

​

​

​

​

​

​

​

Accumulated

​

​

​

​

​

​

​

​

​

​

​

Additional

​

​

​

​

Other

​

​

​

​

​

​

​

​

Common

​

Paid-In

​

Retained

​

Comprehensive

​

Noncontrolling

​

​

​

​

    

Stock

    

Capital

    

Earnings

    

Earnings

    

Interest

    

Total

Balance on December 29, 2018

​

$

60,884

​

$

178,540

  

$

839,917

​

$

(5,938)

  

$

15,281

  

$

1,088,684

Net earnings

​

​

​

  

​

​

  

 

179,650

​

 

  

​

 

2,754

  

 

182,404

Foreign currency translation adjustment

​

​

​

  

​

​

  

​

​

  

 

568

​

 

464

  

 

1,032

Unrealized gain (loss) on investment & foreign currency

​

​

​

  

​

​

  

​

​

  

 

481

​

 

  

​

 

481

Distributions to noncontrolling interest

​

​

​

  

​

​

  

​

​

  

​

​

  

 

(2,143)

​

 

(2,143)

Additional purchase of noncontrolling interest

​

​

​

​

​

(4,737)

​

​

​

​

​

​

​

​

(2,338)

​

​

(7,075)

Cash dividends - $0.40 per share

​

​

​

​

​

​

​

​

(24,549)

​

​

​

​

​

​

​

 

(24,549)

Issuance of 33,647 shares under employee stock purchase plan

​

 

34

​

 

1,059

  

 

​

​

 

  

​

 

  

  

 

1,093

Issuance of 309,628 shares under stock grant programs

​

 

310

​

 

5,654

  

​

4

  

​

​

  

​

​

  

 

5,968

Issuance of 181,565 shares under deferred compensation plan

​

 

181

​

 

(181)

  

​

​

  

​

​

  

​

​

  

 

—

Expense associated with share-based compensation arrangements

​

​

​

  

 

3,843

​

 

  

​

 

  

​

 

  

​

 

3,843

Accrued expense under deferred compensation plans

​

​

​

  

 

7,995

​

 

  

​

 

  

​

 

  

​

  

7,995

Balance on December 28, 2019

​

$

61,409

​

$

192,173

  

$

995,022

​

$

(4,889)

  

$

14,018

  

$

1,257,733

Net earnings

​

​

​

  

​

​

  

 

246,778

​

 

  

​

 

7,104

  

 

253,882

Foreign currency translation adjustment

​

​

​

  

​

​

  

​

​

  

 

1,373

​

 

2,872

  

 

4,245

Unrealized gain on debt securities

​

​

​

  

​

​

  

​

​

  

 

1,722

​

 

  

​

 

1,722

Distributions to noncontrolling interest

​

​

​

  

​

​

  

​

​

  

​

​

  

 

(933)

​

 

(933)

Noncontrolling interest related to business combinations

​

​

​

​

​

130

​

​

​

​

​

​

​

​

(225)

​

​

(95)

Cash dividends - $0.50 per share

​

​

​

  

​

​

  

 

(30,669)

​

 

  

​

 

  

​

 

(30,669)

Issuance of 35,133 shares under employee stock purchase plan

​

 

35

​

 

1,360

  

​

​

  

​

​

  

​

​

  

 

1,395

Issuance of 390,720 shares under stock grant programs

​

 

390

​

 

12,140

  

​

5

  

​

​

  

​

​

  

 

12,535

Issuance of 127,735 shares under deferred compensation plan

​

 

128

​

 

(128)

  

​

​

  

​

​

  

​

​

  

 

—

Repurchase of 756,397 shares

​

​

(756)

​

​

​

​

​

(28,456)

​

​

​

​

​

​

​

​

(29,212)

Expense associated with share-based compensation arrangements

​

​

​

  

 

3,905

​

 

  

​

 

  

​

 

  

​

 

3,905

Accrued expense under deferred compensation plans

​

​

​

  

 

8,644

​

 

  

​

 

  

​

 

  

​

 

8,644

Balance on December 26, 2020

​

$

61,206

​

$

218,224

  

$

1,182,680

​

$

(1,794)

  

$

22,836

  

$

1,483,152

Net earnings

​

​

​

​

​

​

​

​

535,640

​

​

​

​

​

16,724

​

​

552,364

Foreign currency translation adjustment

​

​

​

​

​

​

​

​

​

​

​

(2,584)

​

​

(1,685)

​

​

(4,269)

Unrealized gain on investments and other

​

​

​

​

​

​

​

​

​

​

​

(1,027)

​

​

​

​

​

(1,027)

Distributions to noncontrolling interest

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(6,750)

​

​

(6,750)

Noncontrolling interest related to business combinations

​

​

​

​

​

​

​

​

​

​

​

​

​

​

6,831

​

​

6,831

Cash dividends - $0.65 per share

​

​

​

​

​

​

​

​

(40,209)

​

​

​

​

​

​

​

​

(40,209)

Issuance of 33,104 shares under employee stock purchase plan

​

​

33

​

​

2,083

​

​

​

​

​

​

​

​

​

​

​

2,116

Issuance of 546,235 shares under stock grant programs

​

​

546

​

​

3,506

​

​

10

​

​

​

​

​

​

​

​

4,062

Issuance of 116,732 shares under deferred compensation plan

​

​

117

​

​

(117)

​

​

​

​

​

​

​

​

​

​

​

—

Expense associated with share-based compensation arrangements

​

​

​

​

​

11,071

​

​

​

​

​

​

​

​

​

​

​

11,071

Accrued expense under deferred compensation plans

​

​

​

​

​

9,228

​

​

​

​

​

​

​

​

​

​

​

9,228

Balance on December 25, 2021

​

$

61,902

​

$

243,995

​

$

1,678,121

​

$

(5,405)

​

$

37,956

​

$

2,016,569

​

See notes to consolidated financial statements

​

27

Table of Contents

UFP INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

​

​

​

​

​

​

​

​

​

​

(in thousands)

​

Year Ended

​

​

December 25,

​

December 26,

​

December 28,

​

    

2021

    

2020

    

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

​

​

​

  

​

​

  

​

​

Net earnings

​

$

552,364

    

$

253,882

    

$

182,404

Adjustments to reconcile net earnings to net cash from operating activities:

​

​

​

  

​

​

  

​

​

Depreciation

​

 

84,184

​

 

63,964

​

 

60,494

Amortization of intangibles

​

 

13,948

​

 

8,716

​

 

6,325

Expense associated with share-based and grant compensation arrangements

​

 

11,224

​

 

4,034

​

 

4,007

Deferred income taxes

​

 

5,653

​

 

1,857

​

 

7,176

Unrealized gain on investments and other

​

 

(4,118)

​

 

(2,076)

​

 

(2,523)

Equity in earnings of investee

​

​

3,902

​

​

—

​

​

—

Net gain on sale and disposition of assets

​

 

(11,992)

​

 

1,470

​

 

1,565

Goodwill impairment

​

​

—

​

​

11,485

​

​

—

Gain from reduction of estimated earnout liability

​

​

—

​

​

(4,134)

​

​

—

Changes in:

​

​

​

  

​

​

  

​

​

Accounts receivable

​

 

(85,439)

​

 

(87,552)

​

 

(16,872)

Inventories

​

 

(260,301)

​

 

(76,022)

​

 

73,120

Accounts payable and cash overdraft

​

 

78,060

​

 

62,405

​

 

(24,132)

Accrued liabilities and other

​

 

124,992

​

 

98,448

​

 

57,727

NET CASH PROVIDED BY OPERATING ACTIVITIES

​

 

512,477

​

 

336,477

​

 

349,291

CASH FLOWS FROM INVESTING ACTIVITIES:

​

​

​

  

​

​

  

​

​

Purchases of property, plant and equipment

​

 

(151,166)

​

 

(89,182)

​

 

(84,933)

Proceeds from sale of property, plant and equipment

​

 

29,973

​

 

2,922

​

 

1,777

Acquisitions and purchases of non-controlling interest, net of cash received

​

 

(475,960)

​

 

(65,255)

​

 

(39,122)

Investment in life insurance contracts

​

 

—

​

 

—

​

 

(15,253)

Purchases of investments

​

 

(23,797)

​

 

(28,054)

​

 

(13,352)

Proceeds from sale of investments

​

 

14,882

​

 

24,805

​

 

9,828

Other

​

 

(5,119)

​

 

46

​

 

(982)

NET CASH USED IN INVESTING ACTIVITIES

​

 

(611,187)

​

 

(154,718)

​

 

(142,037)

CASH FLOWS FROM FINANCING ACTIVITIES:

​

​

​

  

​

​

  

​

​

Borrowings under revolving credit facilities

​

 

892,072

​

 

6,862

​

 

422,057

Repayments under revolving credit facilities

​

 

(888,695)

​

 

(6,498)

​

 

(460,537)

Contingent consideration payments and other

​

​

(3,176)

​

​

(5,787)

​

​

(3,136)

Issuance of long-term debt

​

​

—

​

​

150,000

​

​

—

Proceeds from issuance of common stock

​

 

2,116

​

 

1,395

​

 

1,093

Dividends paid to shareholders

​

 

(40,209)

​

 

(30,669)

​

 

(24,549)

Distributions to noncontrolling interest

​

​

(6,750)

​

​

(932)

​

​

(2,216)

Repurchase of common stock

​

 

—

​

 

(29,212)

​

 

—

Other

​

 

(364)

​

 

62

​

 

20

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

​

 

(45,006)

​

 

85,221

​

 

(67,268)

Effect of exchange rate changes on cash

​

 

(1,669)

​

 

962

​

 

482

NET CHANGE IN CASH AND CASH EQUIVALENTS

​

 

(145,385)

​

 

267,942

​

 

140,468

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR

​

 

436,608

​

 

168,666

​

 

28,198

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD

​

$

291,223

​

$

436,608

​

$

168,666

​

​

​

​

​

​

​

​

​

​

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:

​

​

​

​

​

​

​

​

​

Cash and cash equivalents, beginning of period

​

$

436,507

​

$

168,336

​

$

27,316

Restricted cash, beginning of period

​

​

101

​

​

330

​

​

882

Cash, cash equivalents, and restricted cash, beginning of period

​

$

436,608

​

$

168,666

​

$

28,198

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents, end of period

​

$

286,662

​

$

436,507

​

$

168,336

Restricted cash, end of period

​

​

4,561

​

​

101

​

​

330

Cash, cash equivalents, and restricted cash, end of period

​

$

291,223

​

$

436,608

​

$

168,666

​

​

​

​

​

​

​

​

​

​

SUPPLEMENTAL INFORMATION:

​

​

​

  

​

​

  

​

​

Interest paid

​

$

14,077

​

$

7,204

​

$

8,763

Income taxes paid

​

 

167,043

​

 

77,964

​

 

50,224

NON-CASH INVESTING ACTIVITIES

​

​

​

  

​

​

  

​

​

Capital expenditures included in accounts payable

​

 

3,256

​

 

—

​

 

—

NON-CASH FINANCING ACTIVITIES:

​

​

​

​

​

​

​

​

​

Common stock issued under deferred compensation plans

​

$

7,487

​

$

6,870

​

$

6,229

​

See notes to consolidated financial statements

​

28

Table of Contents

​

UFP INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

OPERATIONS

We are a holding company whose subsidiaries supply wood, wood composite and other products to three markets: retail, construction and industrial. Founded in 1955, we are headquartered in Grand Rapids, Michigan, with affiliates throughout North America, Europe, Asia and Australia.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries and partnerships. In addition, we consolidate any entity which we own 50% or more and exercise control. Intercompany transactions and balances have been eliminated.

NONCONTROLLING INTEREST IN SUBSIDIARIES

Noncontrolling interest in results of operations of consolidated subsidiaries represents the noncontrolling shareholders’ share of the income or loss of various consolidated subsidiaries. The noncontrolling interest reflects the original investment by these noncontrolling shareholders combined with their proportional share of the earnings or losses of these subsidiaries, net of distributions paid.

FISCAL YEAR

Our fiscal year is a 52 or 53 week period, ending on the last Saturday of December. Unless otherwise stated, references to 2021, 2020, and 2019 relate to the fiscal years ended December 25, 2021, December 26, 2020, and December 28, 2019, respectively. Fiscal years 2021, 2020, and 2019 were comprised of 52 weeks.

FAIR VALUE DISCLOSURES OF FINANCIAL INSTRUMENTS

We follow ASC Topic 820, Fair Value Measurements and Disclosures, which provides a consistent definition of fair value, focuses on exit price, prioritizes the use of market-based inputs over entity-specific inputs for measuring fair value and establishes a three-tier hierarchy for fair value measurements. This topic requires fair value measurements to be classified and disclosed in one of the following three categories:

●Level 1 — Financial instruments with unadjusted, quoted prices listed on active market exchanges.
●Level 2 — Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over-the-counter traded financial instruments. Financial instrument values are determined using prices for recently traded financial instruments with similar underlying terms and direct or indirect observational inputs, such as interest rates and yield curves at commonly quoted intervals.
●Level 3 — Financial instruments not actively traded on a market exchange and there is little, if any, market activity. Values are determined using significant unobservable inputs or valuation techniques.

Our investment portfolio includes restricted investments within our wholly-owned subsidiary, Ardellis Insurance Ltd. There are $19.3 million of restricted investments recorded as of December 25, 2021.

29

Table of Contents

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash and highly liquid investments purchased with an original maturity of three months or less.

INVESTMENTS

Investments are deemed to be "available for sale" and are, accordingly, carried at fair value being the quoted market value.

ACCOUNTS RECEIVABLE AND ALLOWANCES

We perform periodic credit evaluations of our customers and generally do not require collateral. Accounts receivable are due under a range of terms we offer to our customers. Discounts are offered, in most instances, as an incentive for early payment.

We base our allowances related to receivables on historical credit and collections experience, reasonable and supportable forecasts, and the specific identification of other potential problems, including the general economic climate. Actual collections can differ, requiring adjustments to the allowances. Individual accounts receivable balances are evaluated on a monthly basis, and those balances considered uncollectible are charged to the allowance.

The following table presents the activity in our accounts receivable allowances (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

​

    

Additions

    

​

​

    

​

​

​

​

​

​

​

Charged to

​

​

​

​

​

​

​

​

Beginning

​

Costs and

​

​

​

Ending

​

​

Balance

​

Expenses

​

Deductions*

​

Balance

Year Ended December 25, 2021:

 

​

  

 

​

  

 

​

  

 

​

  

Allowance for possible losses on accounts receivable

​

$

4,629

​

$

66,883

​

$

(66,427)

​

$

5,085

Year Ended December 26, 2020:

​

 

  

​

 

  

​

 

  

​

 

  

Allowance for possible losses on accounts receivable

​

$

4,440

​

$

48,954

​

$

(48,765)

​

$

4,629

Year Ended December 28, 2019:

​

 

  

​

 

  

​

 

  

​

 

  

Allowance for possible losses on accounts receivable

​

$

2,601

​

$

39,481

​

$

(37,642)

​

$

4,440

*

Includes accounts charged off, discounts given to customers and actual customer returns and allowances.

We record estimated sales returns, discounts, and other applicable adjustments as a reduction of net sales in the same period revenue is recognized.

Accounts receivable retainage amounts related to long term construction contracts totaled $7.8 million and $8.7 million as of December 25, 2021 and December 26, 2020, respectively. All amounts are expected to be collected within 18 months. Concentration of accounts receivable related to our two largest customers totaled $87.6 million and $97.9 million as of December 25, 2021 and December 26, 2020, respectively.

In June 2016, the FASB issued ASU 2016-13, Financial Instrument-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which changes the current incurred loss model to a forward looking expected credit loss model for most financial assets, such as trade and other receivables, loans and other instruments. The ASU is effective for fiscal years beginning after December 15, 2019. Entities are required to apply the provisions of the standard through a cumulative-effect adjustment to retained earnings as of effective date. We have adopted the new standard as of the beginning of fiscal year 2020 and have concluded the standard does not have a material impact on our consolidated financial statements and disclosures, accounting processes, and internal controls.

30

Table of Contents

INVENTORIES

Inventories are stated at the lower of cost or market. The cost of inventories includes raw materials, direct labor, and manufacturing overhead. Cost is determined on a weighted average basis. Raw materials consist primarily of unfinished wood products and other materials expected to be manufactured or treated prior to sale, while finished goods represent various manufactured and treated wood products ready for sale. We have inventory on consignment at customer locations valued at $37.8 million as of December 25, 2021 and $20.8 million as of December 26, 2020.

PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment are stated at cost. Expenditures for renewals and betterments are capitalized, and maintenance and repairs are expensed as incurred. Amortization of assets held under finance leases is included in depreciation and amortized over the shorter of the estimated useful life of the asset or the lease term. Depreciation is computed principally by the straight-line method over the estimated useful lives of the assets as follows:

​

​

​

​

Land improvements

    

5 to 15 years

Buildings and improvements

 

10 to 32 years

Machinery, equipment and office furniture

 

2 to 20 years

​

Software costs are included in machinery and equipment on the balance sheet with gross amounts and accumulated amortization totaling $6.0 million and $5.3 million as of December 25, 2021, and $5.5 million and $4.9 million as of December 26, 2020, respectively.

​

LONG-LIVED ASSETS

In accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”), when an indicator of potential impairment exists, we evaluate the recoverability of our long-lived assets by determining whether unamortized balances could be recovered through undiscounted future operating cash flows over the remaining lives of the assets. If the sum of the expected future cash flows was less than the carrying value of the assets, an impairment loss would be recognized for the excess of the carrying value over the fair value.

GOODWILL

Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets of acquired businesses. Goodwill and intangible assets deemed to have indefinite lives are not amortized and are subject to impairment tests at least annually in accordance with ASC 350, Intangibles-Goodwill and Other. We review the carrying amounts of goodwill and other non-amortizable intangibles by reporting unit to determine if such assets may be impaired. As of the date of the most recent goodwill impairment test, which utilized data and assumptions as of September 25, 2021, all other reporting units had a fair value that was substantially in excess of the carrying value. In the fourth quarter of 2020, we recorded a non-cash goodwill impairment charge of $11.5 million related to the commercial reporting unit within our construction segment. We believe we have sufficient available information, both current and historical, to support our assumptions, judgments and estimates used in the goodwill impairment test.

Our annual testing date for evaluating goodwill and indefinite-lived intangible asset impairment is the first day of our fourth fiscal quarter for all reporting units. Additionally, we review various triggering events throughout the year to determine whether a mid-year impairment analysis is required.

FOREIGN CURRENCY

Our foreign operations use the local currency as their functional currency. Accordingly, assets and liabilities are translated at exchange rates as of the balance sheet date and revenues and expenses are translated using weighted average rates, with translation adjustments included as a separate component of shareholders’ equity. Gains and losses arising from re-measuring foreign currency transactions are included in earnings.

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Table of Contents

INSURANCE RESERVES

Our wholly-owned insurance company, Ardellis Insurance Ltd.(“Ardellis”), was incorporated on April 21, 2001 under the laws of Bermuda and is licensed as a Class 3A insurer under the Insurance Act 1978 of Bermuda.  On April 14, 2017 the U.S. Branch of Ardellis Insurance Ltd. was granted its Certificate of Authority to transact property and casualty insurance lines as an admitted carrier in the State of Michigan.

We are primarily self-insured for certain employee health benefits, and have self-funded retentions for general liability, automobile liability, property and workers’ compensation. We are fully self-insured for environmental liabilities. The general liability, automobile liability, property, workers’ compensation, and certain environmental liabilities are managed through Ardellis; the related assets and liabilities of which are included in the consolidated financial statements as of December 25, 2021 and December 26, 2020. Our policy is to accrue amounts equal to actuarially determined or internally computed liabilities. The actuarial and internal valuations are based on historical information along with certain assumptions about future events. Changes in assumptions for such matters as legal actions, medical cost trends, and changes in claims experience could cause these estimates to change in the future.

In addition to providing coverage for the Company, Ardellis provides Excess Loss Insurance (primarily medical and prescription drug) to certain third parties. As of December 25, 2021, Ardellis had 43 such contracts in place. Reserves associated with these contracts were $7.1 million at December 25, 2021, and $4.5 million at December 26, 2020, and are accrued based on third party actuarial valuations of the expected future liabilities.

INCOME TAXES

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax asset and liability computations are based on enacted tax laws and rates. Valuation allowances are established when necessary to reduce deferred income tax assets to the amounts expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred income tax assets and liabilities.

REVENUE RECOGNITION

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

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

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

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Table of Contents

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 related 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 related to the total number of units. Revisions in earnings estimates on the construction contracts are recorded in the accounting period in which the basis for such revisions becomes known. Projected losses on individual contracts are charged to operations in their entirety when such losses become apparent.

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

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended

​

    

December 25,

    

December 26,

​

December 28,

    

2021 vs. 2020

​

2020 vs. 2019

​

​

2021

​

2020

​

2019

​

% Change

​

% Change

FOB Shipping Point Revenue

​

$

8,512,012

​

$

5,025,895

​

$

4,272,583

 

69.4%

​

17.6%

Construction Contract Revenue

​

 

124,122

​

​

128,103

​

​

143,426

 

(3.1)%

​

(10.7)%

Total Net Sales

​

$

8,636,134

​

$

5,153,998

​

$

4,416,009

 

67.6%

​

16.7%

​

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 on December 25, 2021 and December 26, 2020 which are included in “Other current assets” and “Accrued liabilities: Other”, respectively (in thousands):

​

​

​

​

​

​

​

​

​

December 25,

​

December 26,

​

    

2021

    

2020

Cost and Earnings in Excess of Billings

    

$

5,602

    

$

4,169

Billings in Excess of Cost and Earnings

​

 

10,744

 

 

11,530

​

SHIPPING AND HANDLING OF PRODUCT

Shipping and handling costs that are charged to and reimbursed by the customer are recognized as revenue. Costs incurred related to the shipment and handling of products are classified in cost of goods sold.

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Table of Contents

SHARE-BASED COMPENSATION

We account for share-based awards in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”), which requires recognition of share-based compensation costs in financial statements based on fair value. Compensation cost is recognized over the period during which an employee is required to provide services in exchange for the award (the requisite service period). Forfeitures are recognized as they occur.

EARNINGS PER SHARE

Earnings per share (“EPS”) is computed using the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends and their respective participation rights in undistributed earnings. Participating securities include non-vested shares of restricted stock in which the participants have non-forfeitable rights to dividends during the performance period. EPS, basic and diluted, is calculated by dividing net earnings attributable to controlling interest, net of applicable taxes, by the weighted average number of shares of common stock outstanding for the period. The computation of EPS is as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

December 25,

    

December 26,

    

December 28,

​

​

2021

​

2020

​

2019

Numerator:

 

​

  

 

​

  

 

​

  

Net earnings attributable to controlling interest

​

$

535,640

​

$

246,778

​

$

179,650

Adjustment for earnings allocated to non-vested restricted common stock

​

 

(17,342)

​

 

(6,903)

​

 

(4,496)

Net earnings for calculating EPS

​

$

518,298

​

$

239,875

​

$

175,154

Denominator:

​

 

  

​

 

  

​

 

  

Weighted average shares outstanding

​

 

62,209

​

 

61,632

​

 

61,649

Adjustment for non-vested restricted common stock

​

 

(2,014)

​

 

(1,724)

​

 

(1,543)

Shares for calculating basic EPS

​

 

60,195

​

 

59,908

​

 

60,106

Effect of dilutive restricted common stock

​

 

159

​

 

20

​

 

24

Shares for calculating diluted EPS

​

 

60,354

​

 

59,928

​

 

60,130

Net earnings per share:

​

 

  

​

 

  

​

 

  

Basic

​

$

8.61

​

$

4.00

​

$

2.91

Diluted

​

$

8.59

​

$

4.00

​

$

2.91

​

USE OF ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. We believe our estimates to be reasonable; however, actual results could differ from these estimates.

​

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Table of Contents

B.FAIR VALUE

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 25, 2021

​

December 26, 2020

​

​

Quoted

​

Prices with

​

​

​

​

​

​

​

Quoted

​

Prices with

​

​

​

​

​

​

​

​

Prices in

​

Other

​

​

Prices with

​

​

​

​

Prices in

​

Other

​

​

Prices with

​

​

​

​

​

Active

​

Observable

​

​

Unobservable

​

​

​

​

Active

​

Observable

​

​

Unobservable

​

​

​

​

​

Markets

​

Inputs

​

​

Inputs

​

​

​

​

Markets

​

Inputs

​

​

Inputs

​

​

​

​

    

(Level 1)

    

(Level 2)

    

​

(Level 3)

​

Total

    

(Level 1)

    

(Level 2)

    

​

(Level 3)

    

Total

Money market funds

​

$

19

    

$

9,392

​

$

—

    

$

9,411

    

$

19

    

$

4,643

​

$

—

    

$

4,662

Fixed income funds

​

 

1,668

​

 

16,910

​

​

—

 

 

18,578

​

 

246

​

 

16,224

​

​

—

 

 

16,470

Treasury securities

​

​

342

​

​

—

​

​

—

​

​

342

​

​

—

​

​

—

​

​

—

​

​

—

Equity securities

​

 

20,163

​

 

—

​

​

—

 

 

20,163

​

 

12,602

​

 

—

​

​

—

 

 

12,602

Alternative investments

​

​

—

​

​

—

​

​

3,785

​

​

3,785

​

​

—

​

​

—

​

​

2,040

​

​

2,040

Mutual funds:

​

​

​

  

​

​

​

​

​

 

​

​

  

​

​

  

​

​

​

​

​

 

​

​

Domestic stock funds

​

 

10,910

​

 

—

​

​

—

 

 

10,910

​

 

8,088

​

 

—

​

​

—

 

 

8,088

International stock funds

​

 

1,687

​

 

—

​

​

—

 

 

1,687

​

 

1,440

​

 

—

​

​

—

 

 

1,440

Target funds

​

 

23

​

 

—

​

​

—

 

 

23

​

 

114

​

 

—

​

​

—

 

 

114

Bond funds

​

 

146

​

 

—

​

​

—

 

 

146

​

 

147

​

 

—

​

​

—

 

 

147

Alternative funds

​

​

483

​

​

—

​

​

—

​

​

483

​

​

482

​

​

—

​

​

—

​

​

482

Total mutual funds

​

 

13,249

​

 

—

​

​

—

 

 

13,249

​

 

10,271

​

 

—

​

​

—

 

 

10,271

Total

​

$

35,441

​

$

26,302

​

$

3,785

​

$

65,528

​

$

23,138

​

$

20,867

​

$

2,040

​

$

46,045

Assets at fair value

​

$

35,441

​

$

26,302

​

$

3,785

 

$

65,528

​

$

23,138

​

$

20,867

​

$

2,040

 

$

46,045

​

From the assets measured at fair value as of December 25, 2021, listed in the table above, $9.0 million of money market funds are held in Cash and Cash Equivalents, $36.5 million of mutual funds, equity securities, and alternative investments are held in Investments, $0.7 million of money market and mutual funds are held in Other Assets for our deferred compensation plan, and $18.9 million of fixed income funds and $0.4 million of money market funds are held in Restricted Investments.

We maintain money market, mutual funds, bonds, and/or stocks in our non-qualified deferred compensation plan and 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.

During 2018, we purchased a private real estate income trust which is valued as a Level 3 asset and is categorized as an “Alternative Investment.”

In accordance with our investment policy, our wholly-owned company, Ardellis Insurance Ltd. ("Ardellis"), maintains an investment portfolio, totaling $55.4 million as of December 25, 2021, consisting of domestic and international stocks, alternative investments, and fixed income bonds.

35

Table of Contents

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 25, 2021

​

December 26, 2020

​

​

​

​

Unrealized

​

​

​

​

​

Unrealized

​

​

​

    

Cost

    

Gain

    

Fair Value

    

Cost

    

Gain

    

Fair Value

Fixed Income

​

$

18,169

    

$

409

  

$

18,578

​

$

15,325

    

$

1,145

  

$

16,470

Treasury Securities

​

​

342

​

​

—

​

​

342

​

​

—

​

​

—

​

​

—

Equity

​

 

15,196

​

 

4,967

  

 

20,163

​

 

9,787

​

 

2,815

  

 

12,602

Mutual Funds

​

​

9,222

​

​

3,325

  

​

12,547

​

​

8,235

​

​

1,430

  

​

9,665

Alternative Investments

​

​

3,003

​

​

782

  

​

3,785

​

​

1,904

​

​

136

  

​

2,040

Total

​

$

45,932

​

$

9,483

  

$

55,415

​

$

35,251

​

$

5,526

  

$

40,777

​

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 alternative investments consist of the private real estate income trust which is valued as a Level 3 asset.  The net pre-tax unrealized gain was $9.5 million for the year ended December 25, 2021. Carrying amounts above are recorded in the investments and restricted investments line items within the balance sheet as of December 25, 2021 and December 26, 2020.

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Table of Contents

C.BUSINESS COMBINATIONS

We completed the following business combinations in fiscal 2021 and 2020, which were accounted for using the purchase method (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

Net 

​

Company

Acquisition 

​

Intangible 

Tangible 

Operating

Name

Date

Purchase Price

Assets

Assets

Segment

​

December 20, 2021

$20,854
cash paid for 100% stock purchase

$

11,481

$

9,373

Industrial

Advantage Labels & Packaging, Inc. (Advantage)

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

​

November 22, 2021

$11,155
cash paid for 70% stock purchase

$

9,106

$

2,049

Other

Ficus Pax Private Limited (Ficus)

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

​

November 1, 2021

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

$

5,681

$

303

Other

Boxpack Packaging (Boxpack)

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

​

September 27, 2021

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

$

4,039

$

2,404

Construction

Shelter Products, Inc. (Shelter)

Based in Haleyville, Alabama, Shelter operates its distribution and logistics business from an 87,800 sq.-ft. warehouse that specializes in manufactured housing industry customers. Shelter’s facility is adjacent to a UFP manufacturing facility that supplies trusses to manufactured housing builders, and the proximity will enable additional operational synergies. The Company had sales of approximately $11.4 million in 2020.

​

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.

37

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

Net 

​

Company

Acquisition 

​

Intangible 

Tangible 

Operating

Name

Date

Purchase Price

Assets

Assets

Segment

​

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 five 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.

​

March 1, 2021

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

$

4,264

$

460

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).

​

December 28, 2020

$259,011
cash paid for 100% stock purchase

$

79,917

$

179,094

Retail/Industrial

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 five pressure-treating facilities in the Southeastern U.S. PalletOne and its affiliates had 2020 sales of $698 million.

​

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% stock 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.

38

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

Net 

​

Company

Acquisition 

​

Intangible 

Tangible 

Operating

Name

Date

Purchase Price

Assets

Assets

Segment

​

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 eight locations in Italy. These locations generated annual sales of approximately $14 million.

​

July 14, 2020

$18,496
cash paid for 100% asset purchase and estimated contingent consideration

$

12,458

$

6,038

Industrial

T&R Lumber Company (T&R)

A manufacturer and distributor of a range of products used primarily by nurseries, including plastic growing containers, pots and trays; wooden stakes; trellises; tree boxes; shipping racks; and other nursery supplies based in Rancho Cucamonga, California. T&R had annual sales of approximately $31 million. The acquisition of T&R will allow us to leverage their expertise using our national manufacturing capacity to grow our agricultural product offerings and customer base across the country.

​

March 13, 2020

$22,951
cash paid for 100% asset purchase and estimated contingent consideration

$

20,262

$

2,689

Construction

Quest Design & Fabrication and Quest Architectural Millwork (Quest)

A designer, fabricator, and installer of premium millwork and case goods for a variety of commercial uses. Quest had annual sales of approximately $22 million. The acquisition of Quest expands our architectural millwork capabilities and expertise in our commercial construction business unit, and will allow us to use our national manufacturing capacity to grow and diversify our sales to this end market

​

The intangible assets for each acquisition were finalized and allocated to their respective identifiable intangible asset and goodwill accounts during 2021, except for our 2021 acquisitions.  In aggregate, acquisitions made during 2021 and 2020, contributed approximately $1.2 billion in net sales and $50.5 million in operating profit during 2021.

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Table of Contents

At December 25, 2021, the amounts assigned to major intangible classes for the business combinations mentioned above are as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Non-

​

​

    

​

​

    

​

​

​

​

​

    

Intangibles -

​

​

Compete

​

​

​

Customer

​

​

​

​

​

​

Tax

​

​

Agreements

​

Patents

​

Relationships

​

Tradename

​

Goodwill

​

Deductible

Advantage

​

$

—

​

$

—

​

$

—

​

$

—

​

$

11,481

*

$

11,481

Ficus

​

​

—

​

​

—

​

​

—

​

​

—

​

​

8,889

*

​

8,889

Boxpack

​

​

—

​

​

—

​

​

2,694

*

​

—

​

​

1,978

*

​

4,672

Shelter

​

​

—

​

​

—

​

​

2,019

*

​

—

​

​

2,020

*

​

4,039

Endurable

​

​

—

​

​

—

​

​

4,617

*

​

—

​

​

2,482

*

​

7,099

Walnut Hollow

​

​

—

​

​

—

​

​

1,263

*

​

—

​

​

263

*

​

1,526

Gilmores

​

​

—

​

​

—

​

​

1,938

*

​

—

​

​

1,938

*

​

3,876

PalletOne

​

​

—

​

​

—

​

​

18,089

​

​

17,450

​

​

44,378

​

​

79,917

Atlantic Prefab

​

​

417

​

​

—

​

​

1,620

​

​

150

​

​

1,356

​

​

3,543

Exterior Designs

​

​

667

​

​

—

​

​

2,592

​

​

240

​

​

2,241

​

​

5,740

Patriot Building Systems

​

​

306

​

​

—

​

​

1,188

​

​

110

​

​

1,036

​

​

2,640

FRCT

​

​

1,090

​

​

—

​

​

1,960

​

​

210

​

​

1,962

​

​

5,222

Enwrap

​

​

790

​

​

1,293

​

​

558

​

​

474

​

​

3,705

​

​

6,820

T&R

​

​

600

​

​

—

​

​

5,000

​

​

2,600

​

​

4,258

​

​

12,458

Quest

​

​

—

​

​

—

​

​

10,318

​

​

1,903

​

​

8,041

​

​

20,262

​

*(estimate)

​

The business combinations mentioned above were not significant to our operating results individually or in aggregate, and thus pro forma results for 2021 and 2020 are not presented.

D.GOODWILL AND OTHER INTANGIBLE ASSETS

As described in Note M — Segment Reporting, our segment structure is based upon the markets we serve and goodwill has been allocated to the segments using a relative fair value approach. The changes in the net carrying amount of goodwill by reporting segment for the years ended December 25, 2021 and December 26, 2020, are as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Retail

    

Industrial

    

Construction

    

All Other

    

Corporate

    

Total

Balance as of December 28, 2019

 

$

58,098

 

$

81,276

 

$

82,911

 

$

7,251

​

$

—

 

$

229,536

2020 Acquisitions

 

​

3,643

​

​

6,549

​

​

18,902

​

​

4,441

​

​

—

 

​

33,535

2020 Purchase Accounting Adjustments

​

​

202

​

​

2

​

​

—

​

​

—

​

​

—

​

​

204

2020 Impairments

​

​

—

​

​

—

​

​

(11,485)

​

​

—

​

​

—

​

​

(11,485)

Foreign Exchange, Net

 

​

—

​

​

—

​

​

401

​

​

2

​

​

—

 

​

403

Balance as of December 26, 2020

 

$

61,943

 

$

87,827

 

$

90,729

 

$

11,694

​

$

—

 

$

252,193

2021 Acquisitions

 

​

13,115

​

​

43,006

​

​

4,502

​

​

13,880

​

​

—

 

​

74,503

2021 Purchase Accounting Adjustments

​

​

(1,682)

​

​

(2,292)

​

​

(6,228)

​

​

(478)

​

​

—

​

​

(10,680)

Foreign Exchange, Net

 

​

—

​

​

—

​

​

(3)

​

​

(975)

​

​

—

 

​

(978)

Balance as of December 25, 2021

​

$

73,376

 

$

128,541

​

$

89,000

​

$

24,121

​

$

—

​

$

315,038

​

As of the date of the most recent goodwill impairment test, which utilized data and assumptions as of September 25, 2021, all reporting units had fair values that were substantially in excess of their carrying values. In the prior year, we experienced significantly lower than expected operating results within our commercial reporting unit, which is within the Construction segment.  It was determined that the carrying value of the reporting unit exceeded its fair value and we recorded a non-cash goodwill impairment charge of $11.5 million as of December 26, 2020, which represented the entire amount of the goodwill recorded within the reporting unit, as a result.

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Table of Contents

Indefinite-lived intangible assets totaled $7.4 million as of December 25, 2021 and December 26, 2020 related to the commercial unit within the construction segment, the international unit within the all other segment, and the Deckorators unit within the retail segment.

The following amounts were included in other amortizable intangible assets, net as of December 25, 2021 and December 26, 2020 (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2021

​

2020

​

    

​

​

    

Accumulated

    

​

​

    

​

​

    

Accumulated

    

​

​

​

​

Assets

​

Amortization

​

Net Value

​

Assets

​

Amortization

​

Net Value

Non-compete agreements

​

$

8,490

​

$

(4,160)

​

$

4,330

​

$

4,847

​

$

(2,728)

​

$

2,119

Customer relationships and other

​

 

101,158

​

 

(25,012)

​

​

76,146

​

 

80,343

​

 

(17,021)

​

​

63,322

Licensing agreements

​

 

4,589

​

 

(4,589)

​

​

—

​

 

4,589

​

 

(4,589)

​

​

—

Patents

​

 

3,221

​

 

(1,137)

​

​

2,084

​

 

965

​

 

(509)

​

​

456

Tradename

​

​

30,392

​

​

(4,599)

​

​

25,793

​

​

8,019

​

​

(2,123)

​

​

5,896

Software

​

​

959

​

​

(295)

​

​

664

​

​

505

​

​

(46)

​

​

459

Total

​

$

148,809

​

$

(39,792)

​

$

109,017

​

$

99,268

​

$

(27,016)

​

$

72,252

​

Amortization is computed principally by the straight-line method over the estimated useful lives of the intangible assets as follows:

​

​

​

​

​

​

​

    

​

    

Weighted Average

Intangible Asset Type

​

Estimated Useful Life

​

Amortization Period

Non-compete agreements

 

3 to 15 years

 

7.8 years

Customer relationship

 

5 to 15 years

 

9.7 years

Licensing agreements

 

10 years

 

10 years

Patents

​

10 years

​

10 years

Tradename (amortizable)

 

5 to 15 years

 

11 years

Software

​

3 to 5 years

​

3.5 years

​

Amortization expense of intangibles totaled $13.9 million, $8.7 million and $6.3 million in 2021, 2020 and 2019, respectively. The estimated amortization expense for intangibles for each of the five succeeding fiscal years is as follows (in thousands):

​

​

​

​

2022

    

$

13,734

2023

​

 

12,878

2024

​

 

12,409

2025

​

 

11,901

2026

​

 

10,944

Thereafter

​

 

47,151

Total

​

$

109,017

​

​

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Table of Contents

E.DEBT

On November 1, 2018, we entered into a five-year, $375 million unsecured revolving credit facility with a syndicate of U.S. banks led by JPMorgan Chase Bank, N.A., as administrative agent and Wells Fargo Bank, N.A., as syndication agent. The facilities include up to $40 million which may be advanced in the form of letters of credit, and up to $100 million (U.S. dollar equivalent) which may be advanced in Canadian dollars, Australian dollars, pounds Sterling, Euros and such other foreign currencies as may subsequently be agreed upon among the parties. Cash borrowings are charged interest based upon an index selected by the Company, plus a margin that is determined based upon the index selected and upon the financial performance of the Company and certain of its subsidiaries. We are charged a facility fee on the entire amount of the lending commitment, at a per annum rate ranging from 12.5 to 30.0 basis points, also determined based upon our performance. The facility fee is payable quarterly in arrears. On February 28, 2021, our credit agreement was amended to increase the availability from $375 million to $550 million by exercising the accordion  feature in the original agreement.

On August 10, 2020, we entered into an unsecured Note Purchase Agreement under which we issued our 3.04% Series 2020 E Senior Notes, due August 10, 2032, in the aggregate principal amount of $50 million, our 3.08% Series 2020 F Senior Notes, due August 10, 2033, in the aggregate principal amount of $50 million, and our 3.15% Series 2020 G Senior Notes, due August 10, 2035, in the aggregate principal amount of $50 million. Proceeds from the sale of the Series E, F and G Senior Notes were used to fund the acquisition of PalletOne in January 2021.

Outstanding letters of credit extended on our behalf on December 25, 2021 and December 26, 2020 aggregated $54.2 million and $41.0 million; respectively, which includes approximately $7.1 million related to industrial development revenue bonds.  We had an outstanding balance of $7.8 million and $4.7 million, which includes foreign subsidiary borrowings, on the revolver at December 25, 2021, and December 26, 2020, respectively. After considering letters of credit, we had $535.1 million and $363.2 million in remaining availability on the revolver on December 25, 2021, and December 26, 2020, respectively.  Letters of credit have one-year terms, include an automatic renewal clause, and are charged an annual interest rate of 112.5 basis points, based upon our financial performance.

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Table of Contents

Long-term debt obligations are summarized as follows on December 25, 2021 and December 26, 2020 (amounts in thousands):

​

​

​

​

​

​

​

​

    

2021

    

2020

Series 2020 Senior Notes E, due on August 10, 2032, interest payable semi-annually at 3.04%

​

$

50,000

​

$

50,000

Series 2020 Senior Notes F, due on August 10, 2033, interest payable semi-annually at 3.08%

​

​

50,000

​

​

50,000

Series 2020 Senior Notes G, due on August 10, 2035, interest payable semi-annually at 3.15%

​

​

50,000

​

​

50,000

Series 2018 Senior Notes C, due on June 14, 2028, interest payable semi-annually at 4.20%

​

​

40,000

​

​

40,000

Series 2018 Senior Notes D, due on June 14, 2030, interest payable semi-annually at 4.27%

​

 

35,000

​

 

35,000

Series 2012 Senior Notes Tranche A, due on December 17, 2022, interest payable semi-annually at 3.89%

​

​

35,000

​

​

35,000

Series 2012 Senior Notes Tranche B, due on December 17, 2024, interest payable semi-annually at 3.98%

​

 

40,000

​

 

40,000

Foreign subsidiary borrowings under revolving credit facility, due on November 1, 2023, interest payable monthly at a floating rate (1.06% on December 25, 2021 and 1.125% on December 26, 2020)

​

​

7,818

​

​

4,715

Series 1999 Industrial Development Revenue Bonds, due on August 1, 2029, interest payable monthly at a floating rate (0.14% on December 25, 2021 and 0.20% on December 26, 2020)

​

 

3,300

​

 

3,300

Series 2002 Industrial Development Revenue Bonds, due on December 1, 2022, interest payable monthly at a floating rate (0.18% on December 25, 2021 and 0.22% on December 26, 2020)

​

 

3,700

​

 

3,700

Finance leases and foreign affiliate debt

​

 

5,544

​

 

138

​

​

 

320,362

​

 

311,853

Less current portion

​

 

(42,683)

​

 

(100)

Less debt issuance costs

​

 

(112)

​

 

(146)

Long-term portion

​

$

277,567

​

$

311,607

​

Financial covenants on the unsecured revolving credit facility and unsecured notes include minimum interest coverage 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 among other industry standard covenants. We were within all of our lending requirements on December 25, 2021 and December 26, 2020.

On December 25, 2021, the principal maturities of long-term debt and finance lease obligations are as follows (in thousands):

​

​

​

​

2022

    

$

42,683

2023

​

 

8,863

2024

​

 

40,214

2025

​

 

—

2026

​

 

302

Thereafter

​

 

228,300

Total

​

$

320,362

​

On December 25, 2021, the estimated fair value of our long-term debt, including the current portion, was $334.6 million, which was $14.3 million more than the carrying value. The estimated fair value is based on rates anticipated to be available to us for debt with similar terms and maturities. We consider the valuations of our long-term debt, including the current portion, to be Level 2 liabilities which rely on quoted prices in markets that are not active or observable inputs over the full term of the liability.

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Table of Contents

F.LEASES

We determine if an arrangement is a lease at inception. We lease certain real estate under non-cancelable operating lease agreements with typical original terms ranging from one to ten years. We are required to pay real estate taxes and other occupancy costs under certain leases, which are variable in nature and not included in the right of use asset or lease liability. Certain leases carry renewal options of five to fifteen years. We believe that future leases will likely have similar terms.  We also lease motor vehicles, equipment, and an aircraft under operating lease agreements for periods of one to ten years.  We do not typically enter into leases with residual value guarantees. There were no restrictions or covenants imposed by any lease agreements.

​

We believe finance leases have no significant impact to our consolidated balance sheet and statement of earnings as of December 25, 2021.

​

As of December 25, 2021, we have no leases that have not yet commenced that would significantly impact the rights, obligations, and our financial position.

​

There were no lease transactions between related parties as of December 25, 2021.

The rates implicit in our leases are primarily not readily available. To determine the discount rate used to present value the lease payments, we utilize the 7-year treasury note rate plus a blend of rate spreads associated with our revolver and 10-12-year senior notes along with estimated spreads based on current market conditions.  We feel the determined rate is a reasonable representation of our lease population.

​

Lease costs under non-cancelable operating leases on December 25, 2021 and December 26, 2020 are as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2021

​

​

2020

Operating lease cost

​

$

30,054

​

$

21,594

Short-term lease cost

​

 

5,264

​

 

2,863

Variable lease cost

​

 

4,761

​

 

3,985

Sublease income

​

 

(3,109)

​

 

(1,013)

Total lease cost

​

$

36,970

​

$

27,429

​

The amounts paid for operating leases, included in the measurement of lease liabilities, were $27.4 million in the year ended December 25, 2021 and $20.0 million in the year ended December 26, 2020. In addition, right-of-use assets obtained in exchange for new operating lease liabilities were approximately $46.7 million and $12.8 million, respectively, for the years ended December 25, 2021 and December 29, 2019.

​

Future minimum payments under non-cancelable operating leases on December 25, 2021 are as follows (in thousands):

​

​

​

​

​

    

Operating

​

​

Leases

2022

​

$

26,378

2023

​

 

21,040

2024

​

 

15,842

2025

​

 

13,164

2026

​

 

11,140

Thereafter

​

 

27,123

Total minimum lease payments

​

$

114,687

Less present value discount

​

​

(14,900)

Total lease liability

​

$

99,787

​

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Table of Contents

Rent expense was approximately $40.1 million, $28.4 million, and $29.9 million in 2021, 2020, and 2019, respectively.

As of December 25, 2021 and December 26, 2020, the weighted average lease term for operating leases was 7.33 years and 6.84 years, respectively.  Similarly, the weighted average discount rate for operating leases was 2.87% and 3.12%, respectively.

​

G.DEFERRED COMPENSATION

We have a program whereby certain executives irrevocably elected to defer receipt of certain compensation in 1985 through 1988. Deferred compensation payments to these executives commenced upon their retirement. The remaining deferred compensation liability on December 25, 2021 and December 26, 2020 was $0.2 million. We purchased life insurance on these executives, payable to us in amounts which, if assumptions made as to mortality experience, policy dividends, and other factors are realized, will accumulate cash values adequate to reimburse us for all payments for insurance and deferred compensation obligations. The investment in life insurance contracts as of December 25, 2021 and December 26, 2020, was $12.7 million and $13.3 million, respectively, and is recorded in “Other Assets” on the Consolidated Balance Sheet.

We also maintain a non-qualified deferred compensation plan (the "Plan") for the benefit of senior management employees who may elect to defer a portion of their annual bonus payments and salaries. The Plan provides investment options similar to our 401(k) plan, including our stock. The investment in our stock is funded by the issuance of shares to a Rabbi trust, and may only be distributed in kind. Assets held by the Plan totaled approximately $0.7 million and $0.6 million on December 25, 2021 and December 26, 2020, respectively, and are included in "Other Assets."  Related liabilities totaled $42.1 million and $36.6 million on December 25, 2021 and December 26, 2020, respectively, and are included in "Other Liabilities" and "Shareholders’ Equity."  Assets associated with the Plan are recorded at fair market value. The related liabilities are also recorded at fair market value, with the exception of obligations associated with investments in our stock which are recorded at the market value on the date of deferral.

H.COMMON STOCK

We maintain and administer our shareholder approved Employee Stock Purchase Plan ("Stock Purchase Plan"). The Stock Purchase Plan allows eligible employees to purchase shares of our stock at a share price equal to 85% of fair market value on the purchase date. We have expensed the fair value of the compensation associated with these awards, which approximates the discount. The amount of expense is nominal.

We maintain and administer our shareholder approved Directors’ Retainer Stock Plan ("Stock Retainer Plan").  The Stock Retainer Plan allows eligible members of the Board of Directors to defer the cash portion of their retainer and committee fees and receive shares of our stock at the time of or following their retirement, disability or death. The number of shares to be received is equal to the amount of the cash portion of their retainer and committee fees deferred multiplied by 110%, divided by the fair market value of a share of our stock at the time of deferral. The number of units is increased by the amount of dividends paid on our common stock. The units are immediately vested as of the grant date, since they are considered payment for services rendered quarterly. We recognized expense for this plan of $1.7 million in 2021, and $1.8 million in both 2020 and 2019. Effective January 1, 2017, this plan was amended to allow directors to defer payment of the annual retainer paid in the form of our common stock. The number of shares to be received for their portion of the retainer that is deferred is equal to the amount of shares plus the number of shares attributable to cash dividends payable on those deferred shares.

Finally, we maintain and administer our shareholder approved Long Term Stock Incentive Plan (the "LTSIP”). The LTSIP provides for the grant of stock options, stock appreciation rights, restricted stock, performance shares and other stock-based awards.

Executive Stock Match awards are granted in the year following the requisite service period, which begins at the beginning of each fiscal year, and fully vest on the fifth anniversary of the grant date.

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Table of Contents

There is no unrecognized compensation expense remaining for stock options in 2021, 2020, and 2019.

Below is a summary of common stock issuances for 2021 and 2020:

​

​

​

​

​

​

​

​

    

December 25, 2021

Share Issuance Activity

 

Common Stock

​

​

Average Share Price

Shares issued under the employee stock purchase plan

​

33

​

$

75.18

​

​

​

​

​

​

Shares issued under the employee stock gift program

​

2

​

​

78.37

Shares issued under the director retainer stock program

​

5

​

​

72.66

Shares issued under the bonus plan

​

487

​

​

59.56

Shares issued under the executive stock match plan

​

77

​

​

60.24

Forfeitures

​

(24)

​

​

​

Total shares issued under stock grant programs

​

547

​

$

59.84

​

​

​

​

​

​

Shares issued under the deferred compensation plans

​

117

​

$

64.14

​

​

​

​

​

​

​

​

    

December 26, 2020

Share Issuance Activity

 

Common Stock

​

​

Average Share Price

Shares issued under the employee stock purchase plan

​

35

​

$

46.71

​

​

​

​

​

​

Shares issued under the employee stock gift program

​

3

​

​

48.10

Shares issued under the director retainer stock program

​

46

​

​

25.31

Shares issued under the bonus plan

​

271

​

​

47.52

Shares issued under the executive stock grants plan

​

79

​

​

47.60

Forfeitures

​

(9)

​

​

​

Total shares issued under stock grant programs

​

390

​

$

44.96

​

​

​

​

​

​

Shares issued under the deferred compensation plans

​

128

​

$

53.79

​

A summary of the nonvested restricted stock awards granted under the LTSIP is as follows:

​

​

​

​

​

​

​

​

​

​

​

​

    

​

    

​

​

    

​

​

    

Weighted-

​

​

​

​

​

​

​

Unrecognized

​

Average

​

​

​

​

Weighted-

​

Compensation

​

Period to

​

​

Restricted

​

Average Grant

​

Expense

​

Recognize

​

​

Awards

​

Date Fair Value

​

(in millions)

​

Expense

Nonvested at December 29, 2018

 

1,160,079

 

$

23.32

 

$

7.6

 

1.12 years

Granted

 

318,496

 

​

32.60

 

​

  

 

  

Vested

 

(224,894)

 

​

23.42

 

​

  

 

  

Forfeited

 

(50,786)

 

​

24.18

 

​

  

 

  

Nonvested at December 28, 2019

 

1,202,895

 

$

29.68

 

$

7.9

 

0.86 years

Granted

 

348,016

 

​

47.60

 

​

  

 

  

Vested

 

(177,790)

 

​

22.69

 

​

  

 

  

Forfeited

 

(9,327)

 

​

33.46

 

​

  

 

  

Nonvested at December 26, 2020

 

1,363,794

​

$

35.14

​

$

6.3

 

0.62 years

Granted

 

560,516

 

​

60.24

 

​

  

 

  

Vested

 

(274,271)

 

​

26.50

 

​

  

 

  

Forfeited

 

(23,007)

 

​

39.68

 

​

  

 

  

Nonvested at December 25, 2021

 

1,627,032

​

$

45.23

​

$

6.6

 

0.43 years

​

46

Table of Contents

Under the Stock Purchase Plan and LTSIP, we recognized share-based compensation expense of $11.2 million, $4.0 million, and $4.0 million and the related total income tax benefits of $2.7 million, $1.0 million, and $0.8 million in 2021, 2020 and 2019, respectively.

For the year-ended December 25, 2021, we determined that $60 million of share-based bonus awards, representing 751,978 shares, will be awarded to qualified employees as it relates to the company’s 2021 performance and granted in 2022. Awards granted generally vest after a period of three, five or eight years from the grant date. In addition to the share-based bonus awards, certain employees are eligible to receive performance units equivalent to $2.3 million, or 28,866 shares of stock, if certain performance metrics are achieved after three years. As of December 25, 2021 and December 26, 2020, we recognized approximately $11.5 million and $4 million, respectively, of compensation expense related to share-based bonus awards.‬

In 2021, 2020 and 2019, cash received from share issuances under our plans was $2.1 million, $1.4 million and $1.1 million, respectively.

Effective February 15, 2022, our Board authorized an additional 1.5 million shares to be repurchased under our existing share repurchase program. We repurchased no shares in 2021 and 756,397 shares in 2020 under this program. Following the most recent authorization, the cumulative total authorized shares available for repurchase is approximately 2.6 million shares through the period ending February 3, 2023.

I.RETIREMENT PLANS

We have a profit sharing and 401(k) plan for the benefit of substantially all of our employees, excluding the employees of certain wholly-owned subsidiaries. Amounts contributed to the plan are made at the discretion of the Board of Directors. We matched 25%of employee contributions in 2021, 2020, and 2019, on a discretionary basis, totaling $9.2 million, $7.2 million, and $6.5 million respectively. Included within the total employee matched contribution was an additional matched contribution for hourly employees of $3.7 million, $2.9 million and $2.6 million for 2021, 2020 and 2019, respectively, based on meeting certain performance goals during those years. The basis for matching contributions may not exceed the lesser of 6% of the employee’s annual compensation or the IRS limitation.

We maintain a retirement plan for certain officers of the Company (who have at least 20 years of service with the Company and at least 10 years of service as an officer) whereby we will pay, upon retirement, certain benefits including health care benefits, for a specified period of time if certain eligibility requirements are met. Approximately $13.1 million and $11.8 million are accrued in “Other Liabilities” for this plan on December 25, 2021 and December 26, 2020, respectively.

J.INCOME TAXES

Income tax provisions for the years ended December 25, 2021, December 26, 2020, and December 28, 2019 are summarized as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

    

2021

​

2020

    

2019

Currently Payable:

 

​

  

 

​

  

 

​

  

Federal

​

$

115,077

​

$

59,055

​

$

35,267

State and local

​

 

30,441

​

 

16,709

​

 

10,071

Foreign

​

 

21,095

​

 

8,601

​

 

5,834

​

​

 

166,613

​

 

84,365

​

 

51,172

Net Deferred:

​

 

  

​

 

  

​

 

  

Federal

​

 

6,242

​

 

2,292

​

 

6,895

State and local

​

 

118

​

 

(1,518)

​

 

805

Foreign

​

 

999

​

 

1,962

​

 

(602)

​

​

 

7,359

​

 

2,736

​

 

7,098

Total income tax expense

​

$

173,972

​

$

87,101

​

$

58,270

​

47

Table of Contents

The components of earnings before income taxes consist of the following:

​

​

​

​

​

​

​

​

​

​

​

​

    

2021

    

2020

    

2019

U.S.

​

$

645,316

​

$

308,167

​

$

220,532

Foreign

​

 

81,020

​

 

32,816

​

 

20,142

Total

​

$

726,336

​

$

340,983

​

$

240,674

​

The effective income tax rates are different from the statutory federal income tax rates for the following reasons:

​

​

​

​

​

​

​

​

​

​

    

2021

    

2020

    

2019

 

Statutory federal income tax rate

 

21.0

%  

21.0

%  

21.0

%

State and local taxes (net of  federal benefits)

 

3.3

 

3.4

 

3.9

​

Effect of noncontrolling owned interest in earnings of partnerships

 

n/a

 

n/a

 

(0.1)

​

Tax credits, including foreign tax credit

 

(0.6)

 

(0.9)

 

(1.3)

​

Change in uncertain tax positions reserve

 

(0.1)

 

(0.1)

 

(0.1)

​

Other permanent differences

 

(0.4)

 

0.6

 

0.5

​

Other, net

 

0.7

 

1.5

 

0.3

​

Effective income tax rate

 

23.9

%  

25.5

%  

24.2

%

​

Temporary differences which give rise to deferred income tax assets and (liabilities) on December 25, 2021 and December 26, 2020 are as follows (in thousands):

​

​

​

​

​

​

​

​

    

2021

    

2020

Employee benefits

​

$

27,543

​

$

23,236

Lease liability

​

​

24,627

​

​

19,376

Net operating loss carryforwards

​

 

5,502

​

 

6,463

Foreign subsidiary capital loss carryforward

​

 

527

​

 

527

Other tax credits

​

 

450

​

 

391

Inventory

​

 

2,007

​

 

1,633

Reserves on receivables

​

 

1,446

​

 

1,630

Accrued expenses

​

 

5,735

​

 

3,071

Other, net

​

 

5,233

​

 

8,483

Gross deferred income tax assets

​

 

73,070

​

 

64,810

Valuation allowance

​

 

(3,952)

​

 

(4,044)

Deferred income tax assets

​

 

69,118

​

 

60,766

Depreciation

​

 

(64,387)

​

 

(41,403)

Intangibles

​

 

(38,367)

​

 

(22,840)

Right of use assets

​

​

(23,866)

​

​

(19,376)

Deferred income tax liabilities

​

 

(126,620)

​

 

(83,619)

Net deferred income tax liability

​

$

(57,502)

​

$

(22,853)

​

48

Table of Contents

As of December 25, 2021, we had federal, state and foreign net operating loss carryforwards of $5.5 million and state tax credit carryforwards of $0.5 million, which will expire at various dates.

The NOL and credit carryforwards expire as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net Operating Losses

​

Tax Credits

​

    

U.S.

    

State

    

Foreign

    

U.S.

    

State

2022 - 2026

​

$

—

​

$

—

​

$

536

​

$

—

​

$

—

2027 - 2031

​

 

—

​

​

436

​

​

1,424

​

 

—

​

 

—

2032 - 2036

​

 

—

​

​

670

​

​

106

​

 

—

​

 

450

2037 - 2041

​

 

790

​

​

808

​

​

—

​

 

—

​

 

—

Thereafter

​

 

—

​

​

438

​

​

294

​

 

—

​

 

—

Total

​

$

790

​

$

2,352

​

$

2,360

​

$

—

​

$

450

​

As of December 25, 2021, we believe that it is more likely than not that the benefit from certain state and foreign NOL carryforwards will not be realized. In recognition of this risk, we have provided a valuation allowance of $3.4 million against the various NOLs. Furthermore, there is a valuation allowance of $0.5 million against a capital loss carryforward we have for a wholly-owned subsidiary, UFP Canada, Inc. Based upon the business activity and the nature of the assets of this subsidiary, our ability to realize a future benefit from this carryforward is doubtful. The capital loss has an unlimited carryforward and therefore will not expire unless there is a change in control of the subsidiary.

​

K.ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES

ASC 740, Income Taxes (“ASC 740”) clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. ASC 740 also provides guidance on derecognition, measurement, classification, interest and penalties, and disclosure requirements.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

    

2021

    

2020

    

2019

Gross unrecognized tax benefits beginning of year

​

$

3,892

​

$

4,166

​

$

4,378

Increase in tax positions for prior years

​

 

437

​

 

(82)

​

 

(129)

Increase in tax positions for current year

​

 

839

​

 

730

​

 

768

Lapse in statute of limitations

​

 

(1,565)

​

 

(922)

​

 

(851)

Gross unrecognized tax benefits end of year

​

$

3,603

​

$

3,892

​

$

4,166

​

Our effective tax rate would have been affected by the unrecognized tax benefits had this amount been recognized as a reduction to income tax expense.

We recognized interest and penalties for unrecognized tax benefits in our provision for income taxes. The liability for unrecognized tax benefits included accrued interest and penalties of $0.5 million for each of the years December 25, 2021, December 26, 2020, and December 28, 2019.

We file income tax returns in the United States and in various state, local and foreign jurisdictions. The federal and a majority of state and foreign jurisdictions are no longer subject to income tax examinations for years before 2017. A number of routine state and local examinations are currently ongoing. Due to the potential for resolution of state examinations, the expiration of various statutes of limitation, and new positions that may be taken, it is reasonably possible that the amount of unrecognized tax benefits in the next twelve months $1.1 million.

L.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.

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Table of Contents

In addition, on December 25, 2021, 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 December 25, 2021, we had outstanding purchase commitments on commenced capital projects of approximately $52.7 million.

We provide a variety of warranties for products we manufacture. Historically, warranty claims have not been material. We 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 insure the project owner that the products and installation services are completed in accordance with our contractual obligations. We have agreed to indemnify the surety for claims made against the bonds. As of December 25, 2021, we had approximately $31.5 million in outstanding payment and performance bonds for open projects. We had approximately $10.7 million in payment and performance bonds outstanding for completed projects which are still under warranty.

On December 25, 2021, we had outstanding letters of credit totaling $54.2 million, primarily related to certain insurance contracts and industrial development revenue bonds described further below.

In lieu of cash deposits, we provide irrevocable letters of credit in favor of our insurers and other lenders to guarantee our performance under certain contracts. We currently have irrevocable letters of credit outstanding totaling approximately $47.1 million for these types of arrangements. We have reserves recorded on our balance sheet, in accrued liabilities, that reflect our expected future liabilities under these 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 2021 which would require us to recognize a liability on our balance sheet.

M.SEGMENT REPORTING

ASC 280, Segment Reporting (“ASC 280”), defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

50

Table of Contents

We operate manufacturing, treating and distribution facilities internationally, but primarily in the United States. Our business segments consist of UFP Retail Solutions, UFP Industrial and UFP Construction and align with the end markets we serve. This segment structure allows for a specialized and consistent sales approach among Company operations, efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit and business units are included in our Retail, Industrial, and Construction segments. Two customers, The Home Depot and Lowes, accounted for approximately 16% and 10%, respectively, of our total net sales in fiscal 2021. These customers accounted for approximately 24% and 4%, respectively, of our total net sales in fiscal 2020 and 19% and 4%, respectively, in 2019.

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

“Corporate” includes purchasing, transportation and administrative functions that serve our operating segments. Operating results of Corporate primarily consist net sales to external customers initiated by UFP Purchasing and UFP Transportation and over (under) allocated costs. The operating results of UFP Real Estate, Inc., which owns and leases real estate, and UFP Transportation Ltd., which owns, leases and operates transportation equipment, are also included in the Corporate column. Inter-company lease and service charges are assessed to our operating segments for the use of these assets and services at fair market value rates. Total assets in the Corporate column include unallocated cash and cash equivalents, certain prepaid assets, certain property, equipment and other assets pertaining to the centralized activities of Corporate, UFP Real Estate, Inc., UFP Transportation Ltd, and UFP Purchasing.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

All

​

​

​

​

​

​

​

​

​

​

    

Retail

    

Industrial

    

Construction

    

Other

    

Corporate

    

Total

​

​

​

Net sales to outside customers

​

$

3,418,337

​

$

2,148,142

​

$

2,698,434

​

$

362,473

​

$

8,748

​

$

8,636,134

​

​

​

Intersegment net sales

​

 

214,400

​

 

85,954

​

 

82,026

​

 

455,874

​

 

(838,254)

​

 

—

​

​

​

Interest expense

​

 

98

​

 

12

​

 

1

​

 

184

​

 

13,519

​

 

13,814

​

​

​

Amortization expense

​

 

2,780

​

 

6,093

​

 

3,525

​

 

1,336

​

 

214

​

 

13,948

​

​

​

Depreciation expense

​

 

16,955

​

 

26,219

​

 

13,151

​

 

2,094

​

 

25,765

​

 

84,184

​

​

​

Segment earnings before income taxes

​

 

124,790

​

 

264,958

​

 

264,238

​

 

80,905

​

 

(8,555)

​

 

726,336

​

​

​

Segment assets

​

 

844,189

​

​

741,672

​

​

736,157

​

​

343,363

​

​

579,890

​

 

3,245,271

​

​

​

Capital expenditures

​

 

40,408

​

​

42,652

​

​

22,344

​

​

5,140

​

​

40,622

​

 

151,166

​

​

​

​

51

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2020

​

​

​

​

​

​

​

​

​

​

​

All

​

​

​

​

​

​

​

    

Retail

    

Industrial

    

Construction

    

Other

    

Corporate

    

Total

Net sales to outside customers

​

$

2,167,122

​

$

1,072,117

​

$

1,695,684

​

$

217,094

​

$

1,981

​

$

5,153,998

Intersegment net sales

​

 

142,839

​

 

45,217

​

 

68,294

​

 

283,689

​

 

(540,039)

​

 

—

Interest expense

​

 

2

​

 

22

​

 

—

​

 

90

​

 

9,197

​

 

9,311

Amortization expense

​

 

1,482

​

 

4,159

​

 

2,152

​

 

877

​

 

46

​

 

8,716

Depreciation expense

​

 

11,675

​

 

15,163

​

 

12,123

​

 

1,619

​

 

23,384

​

 

63,964

Segment earnings before income taxes

​

 

155,364

​

 

83,430

​

 

69,092

​

 

38,333

​

 

(5,236)

​

 

340,983

Segment assets

​

 

510,464

​

​

416,487

​

​

510,972

​

​

196,856

​

​

770,112

​

 

2,404,891

Capital expenditures

​

 

16,277

​

​

21,141

​

​

16,902

​

​

2,258

​

​

32,604

​

 

89,182

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2019

​

​

​

​

​

​

​

​

​

​

​

All

​

​

​

​

​

​

​

    

Retail

    

Industrial

    

Construction

    

Other

    

Corporate

    

Total

Net sales to outside customers

​

$

1,498,710

​

$

1,085,635

​

$

1,637,156

​

$

193,785

​

$

723

​

$

4,416,009

Intersegment net sales

​

 

135,705

​

 

45,010

​

 

56,116

​

 

200,426

​

 

(437,257)

​

 

—

Interest expense

​

 

—

​

 

108

​

 

16

​

 

97

​

 

8,479

​

 

8,700

Amortization expense

​

 

1,380

​

 

3,034

​

 

1,164

​

 

747

​

 

—

​

 

6,325

Depreciation expense

​

 

11,041

​

 

14,340

​

 

11,465

​

 

1,532

​

 

22,116

​

 

60,494

Segment earnings before income taxes

​

 

61,708

​

 

82,913

​

 

82,407

​

 

22,025

​

 

(8,379)

​

 

240,674

Segment assets

​

 

402,221

​

 

377,329

​

 

522,638

​

 

136,990

​

 

450,299

​

 

1,889,477

Capital expenditures

​

 

15,502

​

 

20,134

​

 

16,097

​

 

2,150

​

 

31,050

​

 

84,933

​

Information regarding principal geographic areas was as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2021

​

2020

​

2019

​

​

​

​

​

Long-Lived

​

​

​

​

Long-Lived

​

​

​

​

Long-Lived

​

​

​

​

​

Tangible

​

​

​

​

Tangible

​

​

​

​

Tangible

​

    

Net Sales

    

Assets

    

Net Sales

    

Assets

    

Net Sales

    

Assets

United States

​

$

8,395,737

​

$

679,757

​

$

5,022,014

​

$

478,325

​

$

4,308,618

​

$

469,605

Foreign

​

 

240,397

​

​

54,873

​

​

131,984

​

​

36,380

​

​

107,391

​

​

36,878

Total

​

$

8,636,134

​

$

734,630

​

$

5,153,998

​

$

514,705

​

$

4,416,009

​

$

506,483

​

52

Table of Contents

The following table presents, for the periods indicated, our disaggregated net sales (in thousands) by business unit for each segment and our percentage of value-added and commodity-based sales to total net sales by segment.

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended

​

​

December 25,

​

December 26,

​

December 28,

​

    

2021

    

2020

    

2019

Retail

​

​

​

​

​

​

​

​

​

Deckorators

​

$

248,765

​

$

219,930

​

$

185,221

Prowood

​

 

1,349,901

​

 

1,215,201

​

 

786,720

Outdoor Essentials

​

 

392,826

​

 

299,684

​

 

227,767

Sunbelt

​

​

773,909

​

​

—

​

​

—

UFP Edge

​

 

148,927

​

 

114,987

​

 

95,608

Handprint

​

 

101,090

​

 

88,351

​

 

52,553

Retail Building Materials

​

 

395,894

​

 

225,253

​

 

149,153

Other

​

 

7,025

​

 

3,716

​

 

1,688

Total Retail

​

$

3,418,337

​

$

2,167,122

​

$

1,498,710

​

​

​

​

​

​

​

​

​

​

Industrial

​

​

​

​

​

​

​

​

​

North Industrial

​

$

615,092

​

$

385,132

​

$

376,515

Southeast Industrial

​

​

395,069

​

​

229,316

​

​

255,419

Southwest Industrial

​

​

400,515

​

​

238,643

​

​

241,774

West Industrial

​

​

363,300

​

​

206,022

​

​

197,686

PalletOne

​

​

355,347

​

​

—

​

​

—

Protective Packaging

​

​

18,819

​

​

13,004

​

​

14,241

Total Industrial

​

$

2,148,142

​

$

1,072,117

​

$

1,085,635

​

​

​

​

​

​

​

​

​

​

Construction

​

​

​

​

​

​

​

​

​

Factory Built

​

$

1,098,905

​

$

597,017

​

$

479,927

Site Built

​

 

1,190,393

​

 

725,899

​

 

708,767

Commercial

​

​

259,360

​

​

221,988

​

​

290,785

Concrete Forming

​

 

149,776

​

 

150,780

​

 

157,677

Total Construction

​

$

2,698,434

​

$

1,695,684

​

$

1,637,156

​

​

​

​

​

​

​

​

​

​

All Other

​

$

362,473

​

$

217,094

​

$

193,785

​

​

​

​

​

​

​

​

​

​

Corporate

​

$

8,748

​

$

1,981

​

$

723

​

​

​

​

​

​

​

​

​

​

Total Net Sales

​

$

8,636,134

​

$

5,153,998

​

$

4,416,009

​

​

​

​

​

​

​

​

​

​

Value-Added

​

​

​

​

​

​

​

​

​

Retail

​

​

43.2%

​

​

53.8%

​

​

57.8%

Industrial

​

​

67.7%

​

​

64.7%

​

​

66.2%

Construction

​

​

73.0%

​

​

76.3%

​

​

81.4%

All Other and Corporate

​

​

74.9%

​

​

75.6%

​

​

75.8%

Total

​

​

59.7%

​

​

64.3%

​

​

69.3%

​

​

​

​

​

​

​

​

​

​

Commodity-Based

​

​

​

​

​

​

​

​

​

Retail

​

​

56.8%

​

​

46.2%

​

​

42.2%

Industrial

​

​

32.3%

​

​

35.3%

​

​

33.8%

Construction

​

​

27.0%

​

​

23.7%

​

​

18.6%

All Other and Corporate

​

​

25.1%

​

​

24.4%

​

​

24.2%

Total

​

​

40.3%

​

​

35.7%

​

​

30.7%

​

53

Table of Contents

N.QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following table sets forth selected financial information for all of the quarters, consisting of 13 weeks during the years ended December 25, 2021 and December 26, 2020, respectively, (in thousands, except per share data):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

First

​

Second

​

Third

​

Fourth

​

    

2021

    

2020

    

2021

    

2020

    

2021

    

2020

    

2021

    

2020

Net sales

​

$

1,825,004

​

$

1,032,062

​

$

2,700,541

​

$

1,242,001

​

$

2,093,784

​

$

1,486,227

​

$

2,016,805

​

$

1,393,708

Gross profit

​

 

286,554

​

 

167,236

​

 

421,294

​

 

204,931

​

 

327,555

​

 

241,074

​

 

371,564

​

 

187,055

Net earnings

​

 

104,251

​

 

40,570

​

 

175,360

​

 

69,694

​

 

125,747

​

 

78,861

​

 

147,006

​

 

64,757

Net earnings attributable to controlling interest

​

 

103,311

​

 

40,159

​

 

173,382

​

 

66,463

​

 

121,041

​

 

77,204

​

 

137,906

​

 

62,952

Basic earnings per share

​

 

1.67

​

 

0.65

​

 

2.79

​

 

1.08

​

 

1.94

​

 

1.25

​

 

2.21

​

 

1.02

Diluted earnings per share

​

 

1.67

​

 

0.65

​

 

2.78

​

 

1.08

​

 

1.94

​

 

1.25

​

 

2.21

​

 

1.02

​

​

O.SUBSEQUENT EVENTS

On December 27, 2021, we closed on an agreement to purchase 100 percent of the equity of Ultra Aluminum Manufacturing, Inc. (Ultra) located in Howell, Michigan for approximately $26.8 million. Ultra designs and produces an extensive selection of ornamental aluminum fence and railing products for contractors, landscapers, fence dealers and wholesalers. At this time the net tangible assets and intangible assets acquired cannot be disclosed as these are pending final valuations. Initial estimates of Ultra‘s identifiable intangibles, goodwill, and deferred taxes have been made, however, the amounts will be finalized in 2022.

Effective February 15, 2022, our Board authorized an additional 1.5 million shares to be repurchased under our existing share repurchase program. Following the most recent authorization, the cumulative total authorized shares available for repurchase is approximately 2.6 million shares through the period ending February 3, 2023.

​

​

​

54

Table of Contents

MARKET INFORMATION FOR OUR COMMON STOCK

Our common stock trades on The Nasdaq Stock Market (“NASDAQ”) under the symbol UFPI.

​

STOCK PERFORMANCE GRAPH

The following stock price performance graph compares the annual percentage change in the cumulative total return on our common stock with the cumulative total returns of companies comprising the NASDAQ US Benchmark TR index and an industry peer group we selected. The NASDAQ US Benchmark TR index replaces the NASDAQ Stock Market (US Companies) Index in this analysis and going forward, as the CRSP Index data is no longer accessible. The CRSP indexes has been included with data through 2020. The graph assumes an investment of $100 on December 31, 2016, and reinvestment of dividends in all cases.

Graphic

The companies included in our self-determined industry peer group are as follows:

​

​

American Woodmark Corporation

Louisiana-Pacific Corporation

BlueLinx Holdings, Inc.

Masco Corporation

Boise Cascade Company

Simpson Manufacturing Company, Inc.

Builders FirstSource, Inc.

Sonoco Products Company

Cornerstone Building Brands, Inc.

Trex Company, Inc.

Gibraltar Industries, Inc.

WestRock Company

Greif, Inc.

​

​

55

Table of Contents

The returns of each company included in the self-determined peer group are weighted according to each respective company’s stock market capitalization at the beginning of each period presented in the graph above. In determining the members of our peer group, we considered companies who selected UFPI as a member of their peer group, and looked for similarly sized companies or companies that are a good fit with the markets we serve.

DIRECTORS AND EXECUTIVE OFFICERS

​

​

BOARD OF DIRECTORS

SECTION 16 OFFICERS

​

​

William G. Currie

Chairman of the Board

UFP Industries, Inc.

Matthew J. Missad

Chief Executive Officer

​

​

​

Matthew J. Missad

Chief Executive Officer

UFP Industries, Inc.

Patrick M. Webster

President and Chief Operating Officer

​

​

Thomas W. Rhodes

President and Chief Executive Officer

TWR Enterprises, Inc.

Michael R. Cole

Chief Financial Officer and Treasurer

​

​

Bruce A. Merino

Former Senior Vice President of Merchandising

The Home Depot

Allen T. Peters

President and Chief Operating Officer

UFP Retail Solutions, LLC

​

​

Mary Tuuk Kuras

President and Chief Executive Officer

Grand Rapids Symphony

Patrick Benton

President

UFP Construction, LLC

​

​

Brian C. Walker

Partner-Strategic Leadership

Huron Capital

Scott A. Worthington

President

UFP Industrial, LLC

​

​

Michael G. Wooldridge

Partner

Varnum, LLP

Scott T. Bravata

Vice President of Accounting

​

​

Joan A. Budden

Former President

Priority Health

David A. Tutas

Chief Compliance Officer

General Counsel

​

​

Benjamin J. McLean

Chief Executive Officer

Ruan Transportation Management Systems, Inc.

​

​

​

​

56

Table of Contents

SHAREHOLDER INFORMATION

ANNUAL MEETING

The 2022 Annual Shareholder’s Meeting of UFP Industries, Inc. will be held at 8:30 a.m. on April 20, 2022, at 2880 East Beltline Lane NE, Grand Rapids, MI 49525.

SHAREHOLDER INFORMATION

Shares of our stock are traded under the symbol UFPI on the NASDAQ Stock Market. Our 10-K report, filed with the Securities and Exchange Commission, will be provided free of charge to any shareholder upon written request. For more information contact:

Investor Relations Department

UFP Industries, Inc.

2801 East Beltline NE

Grand Rapids, MI 49525

Telephone:  (616) 364-6161

Web:  www.ufpi.com

SECURITIES COUNSEL

Varnum, LLP

Grand Rapids, MI

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Deloitte & Touche LLP

Grand Rapids, MI

TRANSFER AGENT/SHAREHOLDER INQUIRIES

American Stock Transfer & Trust Company serves as the transfer agent for the Corporation. Inquiries relating to stock transfers, changes of ownership, lost or stolen stock certificates, changes of address, and dividend payments should be addressed to:

American Stock Transfer & Trust Co.

6201 15th Ave

Brooklyn, NY 11219

Telephone:  (800) 937-5449

UFP INDUSTRIES®, INC., CORPORATE HEADQUARTERS

2801 East Beltline NE

Grand Rapids, MI 49525

Telephone:  (616) 364-6161

Facsimile:  (616) 364-5558

​

57

EXHIBIT 21

LIST OF REGISTRANT'S SUBSIDIARIES AND AFFILIATES

​

​

​

​

​

​

​

​

11032 Tidewater Trail, LLC

​

Delaware

​

UFP Construction, LLC

​

Michigan

234 Springs Rd., LLC

​

Delaware

​

UFP Dallas, LLC

​

Michigan

2875 Needmore Rd. LLC

​

Delaware

​

UFP Distribution, LLC

​

Michigan

621 Hall St., LLC

​

Delaware

​

UFP Eagan, LLC

​

Michigan

Advantage Label & Packaging, Inc.

​

Michigan

​

UFP Eastern Division, Inc.

​

Michigan

Aljoma Holding Company, LLC

​

Michigan

​

UFP Eatonton, LLC

​

Michigan

Aljoma Lumber, Inc.

​

Florida

​

UFP Elizabeth City, LLC

​

Michigan

Ardellis Insurance Ltd.

​

Bermuda

​

UFP Elkwood, LLC

​

Michigan

Caliper Building Systems, LLC

​

Michigan

​

UFP Financial Services, Inc.

​

Michigan

Deckorators, Inc.

​

Michigan

​

UFP Folkston, LLC

​

Michigan

Enwrap Logistic and Packaging S.r.l.

​

Italy

​

UFP Franklinton, LLC

​

Michigan

Eovations, LLC

​

Michigan

​

UFP Gainesville, LLC

​

Michigan

Ficus Pax

​

India

​

UFP Gear, LLC

​

Michigan

Ficus Tegatai Pvt Ltd

​

India

​

UFP Global Holdings Limited

​

England/Wales

Fire Retardant Chemical Technologies, LLC

​

Illinois

​

UFP Gordon, LLC

​

Michigan

Forestal Universal SA de CV

​

Mexico

​

UFP Grand Rapids, LLC

​

Michigan

Idaho Western, Inc.

​

Idaho

​

UFP Grandview, LLC

​

Michigan

idX (China) Display System Co., Ltd.

​

China

​

UFP Granger, LLC

​

Michigan

idX (India) Display Private Ltd.

​

India

​

UFP Haleyville, LLC

​

Michigan

idX Amsterdam B.V.

​

Netherlands

​

UFP Hamilton, LLC

​

Michigan

idX Asia Fixtures Limited

​

Hong Kong

​

UFP Harrisonville, LLC

​

Michigan

idX Asia Trading Limited

​

Hong Kong

​

UFP Hartford, LLC

​

Wisconsin

idX Chicago, LLC

​

Delaware

​

UFP Hillsboro, LLC

​

Michigan

idX Corporation

​

Delaware

​

UFP Industrial, LLC

​

Michigan

idX Corporation London Limited

​

England/Wales

​

UFP Industries, Inc.

​

Michigan

idX Holdings, Inc.

​

Delaware

​

UFP International Employment Services, LLC

​

Michigan

idX Mexico, S. de R.L. de C.V.

​

Mexico

​

UFP International, LLC

​

Michigan

idX Shanghai Trading Company Ltd.

​

China

​

UFP Janesville, LLC

​

Michigan

Integra International Pty Ltd

​

Australia

​

UFP Kyle, LLC

​

Michigan

Integra Packaging Pty Ltd

​

Australia

​

UFP Lafayette, LLC

​

Michigan

Landura, LLC

​

Texas

​

UFP Lansing, LLC

​

Michigan

Metaworld Technologies, LLC

​

Michigan

​

UFP Londonderry, LLC

​

Michigan

North Atlantic Framing, LLC

​

Michigan

​

UFP Magna, LLC

​

Michigan

Norpal S. de R.L. de C.V.

​

Mexico

​

UFP McMinnville, LLC

​

Michigan

P1 Catawba Development Company, LLC

​

North Carolina

​

UFP Mexico Embalaje y Distribution, S. de R.L. de C. V.

​

Mexico

PaletOne of Acquisition of Texas, Inc.

​

Delaware

​

UFP Mexico Investment, LLC

​

Michigan

PalletOne Manufacturing of Texas, LLC

​

Texas

​

UFP Mid-Atlantic, LLC

​

Michigan

PalletOne of Alabama, LLC

​

Alabama

​

UFP Milwaukee, LLC

​

Michigan

PalletOne of Florida, Inc.

​

Florida

​

UFP Minneota, LLC

​

Michigan

PalletOne of Indiana Transportation, LLC

​

Indiana

​

UFP Morristown, LLC

​

Michigan

PalletOne of Indiana, Inc.

​

Indiana

​

UFP Moultrie, LLC

​

Michigan

PalletOne of Maine, Inc.

​

Maine

​

UFP NAC, LLC

​

Michigan

PalletOne of Mobile, LLC

​

Alabama

​

UFP Nappanee, LLC

​

Michigan

PalletOne of NE Texas, LLC

​

Delaware

​

UFP New London, LLC

​

Michigan

PalletOne of North Carolina, Inc.

​

North Carolina

​

UFP New Waverly, LLC

​

Michigan

PalletOne of Texas Holdings, Inc.

​

Delaware

​

UFP New Windsor, LLC

​

Michigan

PalletOne of Texas, LP

​

Texas

​

UFP New York, LLC

​

Michigan

PalletOne of Virginia, LLC

​

Virginia

​

UFP Orlando, LLC

​

Michigan

PalletOne of Wisconsin Manufacturing, LLC

​

Wisconsin

​

UFP Packaging, LLC

​

Michigan

PalletOne of Wisconsin, Inc.

​

Wisconsin

​

UFP Palm Beach, LLC

​

Michigan

PalletOne, Inc.

​

Delaware

​

UFP Parker, LLC

​

Michigan

Pinelli Lumber, Inc.

​

Texas

​

UFP Purchasing, Inc.

​

Michigan

Pinelli Universal TKT, S de R.L. de C.V.

​

Mexico

​

UFP Ranson, LLC

​

Michigan

Pinelli Universal, S de R.L. de C.V.

​

Mexico

​

UFP Real Estate, LLC

​

Michigan

Pinelli Universal Chile S.A.

​

Chile

​

UFP Retail, LLC

​

Michigan

PR Distribution, LLC

​

Puerto Rico

​

UFP Riverside, LLC

​

Michigan

Shawnlee Construction, LLC

​

Michigan

​

UFP RMS, LLC

​

Michigan

Shepardville Construction, LLC

​

Michigan

​

UFP Rockingham, LLC

​

Michigan

Store Fixtures Canada Holdings, Inc.

​

Delaware

​

UFP Rockwell, LLC

​

Michigan

Sunbelt Acquisition Florida II, LLC

​

Florida

​

UFP Saginaw, LLC

​

Michigan

Sunbelt Acquistion Corp.

​

Delaware

​

UFP Salisbury, LLC

​

Michigan

Sunbelt Acqusition Alabama III, LLC

​

Alabama

​

UFP San Antonio, LLC

​

Michigan

Sunbelt Forest Georgia, LLC

​

Georgia

​

UFP Sauk Rapids, LLC

​

Michigan

Sunbelt Forest Products Alabama, LLC

​

Florida

​

UFP Schertz, LLC

​

Michigan

Sunbelt Forest Products Corporation

​

Florida

​

UFP Shawnee, LLC

​

Michigan

SunOne Logistics, LLC

​

Georgia

​

UFP Site Built, LLC

​

Michigan

The UBEECO Group Pty Ltd

​

Australia

​

UFP Stafford, LLC

​

Michigan

Tibasa Universal Forest Products S. de R.L. de C.V.

​

Mexico

​

UFP Stockertown, LLC

​

Michigan

Tresstar, LLC

​

Michigan

​

UFP Tampa, LLC

​

Michigan

Triangle Systems, Inc.

​

Delaware

​

UFP Thomaston, LLC

​

Michigan

U.F.P. Mexico Holdings, S. de R.L.de CV

​

Mexico

​

UFP Thornton, LLC

​

Michigan

UFP Ashburn, LLC

​

Michigan

​

UFP Transportation, Inc.

​

Michigan

UFP Atlantic Division, LLC

​

Michigan

​

UFP Union City, LLC

​

Michigan

UFP Auburndale, LLC

​

Michigan

​

UFP Ventures II, Inc.

​

Michigan

UFP Aurora, LLC

​

Michigan

​

UFP Warranty Corporation

​

Michigan

UFP Australia Pty Ltd

​

Australia

​

UFP Warrens, LLC

​

Michigan

UFP Australia Real Estate Pty Ltd

​

Australia

​

UFP Washington, LLC

​

Michigan

UFP Barnesville, LLC

​

Michigan

​

UFP Western Division, Inc.

​

Michigan

UFP Belchertown, LLC

​

Michigan

​

UFP White Bear Lake, LLC

​

Michigan

UFP Berlin, LLC

​

Michigan

​

UFP Windsor, LLC

​

Michigan

UFP Biscoe, LLC

​

Michigan

​

UFP Woodburn, LLC

​

Michigan

UFP Blanchester, LLC

​

Michigan

​

Ultra Aluminum Manufacturing, Inc.

​

Michigan

UFP Bonner, LLC

​

Michigan

​

United Lumber & Reman, LLC

​

Alabama

​

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in Registration Statement Nos. 33-81128, 333-60630, 333-150345, 333-156596, and 33-84632 on Form S-8 of our reports dated February 23, 2022, relating to the consolidated financial statements of UFP Industries, Inc. and subsidiaries (the “Company”), and the effectiveness of the Company’s internal control over financial reporting appearing in this Annual Report on Form 10-K for the year ended December 25, 2021.

​

/s/ Deloitte & Touche LLP

Grand Rapids, Michigan

​

February 23, 2022

​

​

Exhibit 31(a)

UFP Industries, Inc.

Certification

I, Matthew J. Missad, certify that:

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

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

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

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

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

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

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

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

5.           The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the Audit Committee of registrant's Board of Directors (or persons performing the equivalent functions):

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

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

​

​

​

​

Date:

February 23, 2022

​

/s/ Matthew J. Missad

​

​

​

Matthew J. Missad

​

​

​

Chief Executive Officer and

​

​

​

Principal Executive Officer

​

​

Exhibit 31(b)

UFP Industries, Inc.

Certification

I, Michael R. Cole, certify that:

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

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

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

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

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

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

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

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

5.           The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the Audit Committee of registrant's Board of Directors (or persons performing the equivalent functions):

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

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

​

​

​

​

​

Date:

February 23, 2022

​

/s/ Michael R. Cole

​

​

​

Michael R. Cole

​

​

​

Chief Financial Officer,

​

​

​

Principal Financial Officer and

​

​

​

Principal Accounting Officer

​

​

Exhibit 32(a)

CERTIFICATE OF THE

CHIEF EXECUTIVE OFFICER OF

UFP INDUSTRIES, INC.

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350):

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

(1)         The report on Form 10-K for the year ended December 25, 2021, which this statement accompanies, fully complies with requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)         The information contained in this report on Form 10-K for the period ended December 25, 2021 fairly presents, in all material respects, the financial condition and results of operations of Universal Forest Products, Inc.

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UFP INDUSTRIES, INC.

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Date:

February 23, 2022

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By:

/s/ Matthew J. Missad

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Matthew J. Missad

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Its:

Chief Executive Officer and

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Principal Executive Officer

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

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Exhibit 32(b)

CERTIFICATE OF THE

CHIEF FINANCIAL OFFICER OF

UFP INDUSTRIES, INC.

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350):

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

(1)         The report on Form 10-K for the period ended December 25, 2021, which this statement accompanies, fully complies with requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)         The information contained in this report on Form 10-K for the period ended December 25, 2021 fairly presents, in all material respects, the financial condition and results of operations of UFP Industries, Inc.

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UFP INDUSTRIES, INC.

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Date:

February 23, 2022

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By:

/s/ Michael R. Cole

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Michael R. Cole

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Its:

Chief Financial Officer,

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Principal Financial Officer and

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Principal Accounting Officer

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

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