UFP Industries' Q2 2023 net sales of $2.04 billion decreased 30% due to a 22% decrease in prices and an 8% decrease in organic unit sales.
Q2 2023 adjusted EBITDA of $234 million decreased 27%; adjusted EBITDA margin rose to 11.5% from 11% in 2022.
Chairman and CEO Matt Missad said: “The positive changes in our business mix and operating structure are producing better performance when compared to previous downward cycles in our business. Our strong cash-flow generation and balance sheet allow us to continue to invest in operational improvements and growing the business through new products and acquisitions, all while returning value to our shareholders. On July 26, 2023, the Board approved a 20% increase in the quarterly cash dividend to $0.30 per share and increased the share repurchase authorization to $200 million.”
UFP Retail Solutions
Net sales of $920 million, down 18% compared to the Q2 2022, attributable to an 18% decline in selling prices due to the pricing decreases in the lumber market. While below target level, gross profit of $121 million improved 65% compared to the Q2 2022 and gross profit margin improved to 13.2% from 6.5%, primarily due to increased sales of new Deckorators products and the impact of products sold with a variable price such as treated lumber. These variable-priced products benefited from a more stabilized lumber market compared to 2022, when a significant decrease in lumber prices during the Q2 adversely impacted gross profit.
UFP Packaging
Net sales of $488 million, down 28% compared to the Q2 2022, due to a 21% decrease in selling prices, a 9% decline in organic unit sales, and a 2% increase in sales from acquisitions. Gross profit was $118.2 million, down 27%, due to normalizing market pricing and a decline in volume that is in line with market conditions. Gross profit margin remained mostly unchanged at 24% due to the segment’s focus on value-added sales and new products. Value-added sales increased to 78% of total net sales compared to 71% for the Q2 2022. New product sales as a percent of total net sales increased to 14.9% from 10.6% during the same period of 2022.
UFP Construction
Net sales of $550 million, down 44% compared to the Q2 2022, due to a 26% decrease in selling prices and an 18% decrease in organic unit sales. Gross profit was $137.2 million, down 40%, largely due to normalizing market pricing and a decrease in volume as a result of a decline in housing starts and industry production of manufactured homes. Gross profit margin improved to 25% from 23% in 2022.
UFP Industries is a holding company whose operating subsidiaries – UFP Packaging, UFP Construction and UFP Retail Solutions – manufacture, distribute and sell a wide variety of value-added products used in residential and commercial construction, packaging and other industrial applications worldwide.
