UFP Industries — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the quarter reached $1.73 billion, an 11.1% increase year-over-year from $1.56 billion.
• Diluted earnings per share were $1.05, down from $1.29 a year ago; net earnings attributable to controlling interests were $58 million, compared to $75 million in the prior year.
• Adjusted EBITDA was $119.3 million (6.9% of net sales), a decrease from $140.0 million (9.0% of net sales) in the prior year.
• Year-to-date net sales were $5.08 billion (up 1.7%), while year-to-date net earnings were $192.9 million (down 24.6%).
• Year-to-date Adjusted EBITDA was $385.1 million (7.6% margin), down from $456.3 million (9.1% margin) in the prior year.
• Cash flows from operating activities for the first nine months were $235 million.
• Free cash flow for the first nine months was $287 million.
• Net margin for the quarter was 3.4%, down from 4.8% in the prior year.

Guidance and Future Outlook:

• Full-year 2026 outlook remains unchanged, with expectations of slightly down overall industry unit demand across segments.
• Energy and transportation costs are expected to remain elevated for the remainder of the year.
• New residential construction demand is expected to remain challenging, though stabilization in other end markets should provide partial offset.
• The company does not anticipate a meaningful improvement in underlying market demand through year-end.
• Long-term goals include achieving 7-10% annual unit sales growth (including acquisitions), 10% of sales from new products, 12.5% adjusted EBITDA margins, and maintaining a conservative capital structure.
• The company expects to meet or exceed its initial $60 million cost-savings objective by year-end.

Business Segments and Product Lines:

• Retail: Net sales increased 6.8% to $634.5 million. Deckorators organic unit sales grew 21%, driven by a 70% increase in Surestone decking sales. ProWood organic unit sales declined 4%. UFP Edge organic unit sales remained flat.
• Packaging: Net sales increased 18.0% to $465.8 million. Structural Packaging organic unit sales grew 14%. PalletOne organic unit sales increased 1% (with acquisitions contributing 18%). Protective Packaging organic unit sales increased 5%.
• Construction: Net sales increased 11.3% to $552.4 million. Site Built organic unit sales increased 12%. Commercial organic unit sales increased 20%. Concrete Forming Solutions organic unit sales increased 6%. Factory Built organic unit sales decreased 10%.
• New product sales represented 8.7% of total net sales, up from 6.8% in the prior year.
• The company completed three acquisitions in 2026 and announced a fourth.

Market and Competitive Landscape:

• Freight costs increased by $19 million (1.3% of net sales) due to higher market-based transportation rates, tightening industry capacity, and elevated fuel costs.
• Freight spot rates (excluding fuel) increased 30% during the quarter before stabilizing at an elevated level.
• Smaller carriers exiting the market contributed to constrained carrier capacity.
• The company continues to gain market share in Commercial and Concrete Forming Solutions through value-added product sales.

Risks and Challenges:

• Elevated transportation and material costs limited earnings benefits from higher volumes.
• Macroeconomic and geopolitical uncertainty impacted consumer sentiment, particularly in the Retail segment.
• Competitive pricing and macroeconomic pressures affected gross profits in the Site Built business unit.
• Loss of lower-margin commodity sales impacted Factory Built organic unit sales.
• Forward-looking statements involve risks including fluctuations in currency, inflation, lumber prices, weather, tariffs, and supply chain challenges.

Management Commentary and Tone:

• CEO Will Schwartz noted that organic unit growth strengthened despite pressure across end markets, citing success in product and market-share initiatives.
• Management emphasized that profitability is meaningfully stronger than in 2019 despite higher transportation costs masking some earnings improvement.
• Schwartz stated the company will continue to pursue productivity, capacity consolidation, and cost reduction opportunities.
• Management highlighted a strong financial position with $2 billion in liquidity and no borrowings outstanding under the revolving credit facility.
• The tone reflects confidence in executing cost-out initiatives and integrating acquisitions to improve profitability without relying on a near-term market recovery.

Other Key Points:

• On October 23, 2026, the company amended and extended its $750 million revolving credit facility for an additional five-year term, expiring October 23, 2031, and increased sublimits for swingline loans and letters of credit to $75 million.
• On October 26, 2026, the company announced plans to acquire Apache Products, Inc., a wood pallet manufacturer, for an estimated $27 million in cash in November 2026.
• The Board declared a quarterly cash dividend of $0.36 per share, a 3% increase from the prior year's rate, payable December 15, 2026.
• During the first nine months of 2026, the company repurchased 2,169,224 shares for $182.7 million. A new repurchase plan authorized up to $300 million through April 30, 2027, with approximately $198 million remaining available as of October 28, 2026.
• Total capital returned to shareholders through dividends and share repurchases so far this year exceeded $240 million.
• The company expects to invest approximately $150 million to $175 million on capital projects for the year.
• Liquidity as of September 26, 2026, was approximately $2.0 billion, consisting of $677 million in cash and cash equivalents and $1.3 billion in remaining availability under the credit facility and shelf agreement.