UFP Industries, Inc. announced Q3 2023 results including net sales of $1.8 billion, net earnings attributable to controlling interests of $134 million, and earnings per diluted share of $2.10.
Q3 2023 Adjusted EBITDA of $208 million decreased 24% while adjusted EBITDA margin declined 40 basis points to 11.4%, which exceeded the company’s minimum EBITDA margin target.
Q3 2023 net sales of $1.83 billion decreased 21% due to a 12% decrease in prices and a 9% decrease in organic unit sales.
UFP Retail Solutions
Net sales of $711 million, down 16% compared to the Q3 2022, attributable to a 9% decline in selling prices and a 7% decline in organic unit sales. Adjusted EBITDA of $53.8 million improved 50% compared to the Q3 2022, and adjusted EBITDA profit margin improved to 7.6% from 4.2% during the Q3 2022. This improvement is primarily due to variable-priced products such as ProWood treated lumber, which benefited from a more stable lumber market than in 2022, when margins were adversely impacted by a significant decrease in lumber prices in the Q3 2022.
UFP Packaging
Net sales of $450 million, down 23% compared to the Q3 2022, due to a 16% decrease in selling prices, a 9% decline in organic unit sales, and a 2% increase in sales from acquisitions. Adjusted EBITDA was $53.7 million, down 40%, due to normalizing market pricing and a decline in volume that is in line with market conditions. Adjusted EBITDA margin decreased to 11.9% from 15.4% due to competitive price pressure and lower volume. Value-added sales increased to 76% of total net sales compared to 74% for the Q3 2022. New product sales as a percent of total net sales increased to 16.1% from 11.5% during the same period of 2022.
UFP Construction
Net sales of $584 million, down 25% compared to the Q3 2022, due to a 12% decrease in selling prices and a 13% decrease in organic unit sales. Adjusted EBITDA was $76.9 million, down 34%, largely due to more normalized market pricing and to a decrease in volume attributable to the decline in housing starts and in the production of manufactured homes. Adjusted EBITDA margin declined to 13.2% from 14.9% during the same period of 2022.
“This quarter once again demonstrated that our balanced business model, management structure, and focus on value-added products have produced structural improvements in our operating margins that have normalized above pre-pandemic levels,” said Chairman and CEO Matthew J. Missad. “We are well-positioned for success and will continue to invest our cash surplus and robust cash flow to grow our business and generate high returns on capital.”
Missad added, “Our ability to generate cash allows us to maintain a balanced approach to capital allocation, as we invest in new products and drive operational improvements through technology and automation, while providing meaningful returns for shareholders. The UFP team has enhanced our strong culture of hard work and proven results by developing an impressive adaptability to internal change and an ability to manage through challenging markets.”
UFP Industries, Inc. 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.
