UFP Industries Announces Fourth Quarter and Fiscal 2023 Results

Net sales of $1.52 billion decreased 20 percent due to a 10 percent decrease in prices and a 10 percent decrease in organic unit sales. The organic unit growth decline was due, in part, to the impact of one less week of operating activity in the fourth quarter of 2023, which resulted in a 6 percent unit decline.

New product sales of $142 million decreased 18 percent, largely due to lower lumber prices. New product sales comprised 9.2 percent of total sales in 2023 compared to 8.9 percent last year.

Earnings from operations of $124 million decreased 26 percent.

Adjusted EBITDA1 of $166 million decreased 22 percent, and adjusted EBITDA1 margin declined 20 basis points to 10.9 percent.

Net sales of $7.2 billion decreased 25 percent from the record year of 2022 due to a 16 percent decrease in prices and a 9 percent decline in organic unit sales. One less week of operating activity in 2023 resulted in a 1 percent unit decline.

New product sales were $716 million, down 6 percent, primarily due to lower lumber prices. New product sales comprised 9.7 percent of total sales in 2023 compared to 7.7 percent in 2022.

Higher-margin, value-added product sales improved to 68 percent of total sales, up from 63 percent in 2022.

Earnings from operations of $647 million decreased 32 percent. 

Diluted EPS of $8.07 decreased 26 percent.

Adjusted EBITDA1 of $810 million decreased 26 percent. Adjusted EBITDA1 margin declined 20 basis points to 11.2 percent.

Acquisitions. In September 2023, the company acquired Palets Suller Group, a leader in machine-built pallets based in Castellón, Spain, for approximately $52 million. The company continues to seek strategic acquisitions that drive long-term growth and margin improvements, enhance its capabilities, and create incremental value for its customers and shareholders.

Capital expenditures. The company invested approximately $180 million in capital expenditures during 2023 and is targeting $250 million to $300 million in capital expenditures for 2024. These investments include expanding capacity for its Deckorators line in the Northeastern U.S., its site-built construction business in the Western U.S., and its packaging business nationally.

Dividend payments. The company paid dividends of $68.2 million or $1.10 per share in 2023, a 16 percent increase per share over 2022. On February 1, 2024, the Board of Directors approved a quarterly dividend payment of $0.33 per share, payable on March 15, 2024, to shareholders of record on March 1, 2024. The dividend represents a 10 percent increase over the quarterly dividend of $0.30 per share paid in December 2023 and a 32 percent increase over the quarterly dividend of $0.25 per share paid in March 2023.

Share repurchases. The company repurchased approximately 975,000 shares of common stock for $82.1 million during 2023 (an average price of $84.27 per share). The company has remaining authorization to purchase up to $173 million in shares through July 31, 2024.

Achieving compounded annual unit sales growth of 7-10 percent. Smaller tuck-in acquisitions are intended to contribute to this goal.

Realizing and sustaining a 12.5 percent adjusted EBITDA margin by continuing to enhance our capabilities and grow our portfolio of sales of value-added products, and by achieving operating improvements. 

Earning an incremental return on investment over our cost of capital.

Maintaining a conservative capital structure.