UFP Industries, Inc. Q1 FY2026 earnings call

• Net sales of $1.46 billion were down 8% from Q1 of 2025, with 7% decrease in units and 1% decrease in price. Adjusted EBITDA margin was 7.6%, earnings per share was 89 cents. - Focus on controlling costs, pursuing M&A, returning free cash flow to shareholders. New product sales remain at 7.5% of sales on a trailing 12-month basis. - Announced acquisitions of MoistureShield decking operations and Berry Pallets. MoistureShield acquisition expands capacity, adds cool deck technology. Berry Pallets expands geographic reach. - ProWood making progress on cost reduction and manufacturing process, launched TruFrame joist product. Decorators saw strong momentum with Shearstone decking sales up 27% and wood plastic composite decking up 4%, measures of consumer interest more than doubled. Packaging making progress with new value-add products, automation, and lower-cost manufacturing. Construction actively repositioning portfolio, launched Frame Forward Systems, added value to customers through partnerships, etc.

Retail: Retail sales were $531 million, down 12% year over year. Pro-wood units declined 15% due to soft demand, adverse weather, etc. Deck Raiders delivered 2% unit growth. Decking sales increased 16% led by 27% growth in surestone and 4% growth in wood plastic composite decking. Edge volume declined 20% as the business unit restructured. Retail adjusted EBITDA was down 1 million year over year. Packaging: Packaging sales were $394 million, down 4% year-over-year. Structural packaging volumes were flat. Pallet 1 units declined 7%, protective packaging units increased 5%. Packaging adjusted EBITDA was $28 million, down $7 million year-over-year. Construction: Construction sales were $465 million, down 10% year over year. Site build units declined 14% due to housing demand pressures. Factory built units declined 7% but mix improved. Commercial and concrete forming achieved mid-teens unit growth. Construction adjusted EBITDA was $26 million, down $12 million year-over-year

• Expect current market environment to persist through 2026. Demand for the balance of the year is trending toward the lower end of prior guidance. - Input costs expected to continue pressure from energy and transportation, but pricing actions underway to offset. - Believe market share gains, capital investments, and operating improvements should help offset headwinds in markets tied to new residential construction. Target $100 million of growth in decorators, decking, and railing sales

• Macro headwinds and competitive pressures increased volatility during the quarter. - Longer than normal winter season impacted normal seasonal uplift. - Higher medical costs affected profitability. - Ongoing geopolitical uncertainty and broadening inflation, particularly around higher transportation costs

Q: On pro wood, would expect to see better volume trends in April?

A: Fair to say, factors like slow storm season carryover, unusual weather patterns, and business mix change. Matches up to single digit down guidance and carries forward.

Q: On decorator side, how decking sales growth matches up to plan and impact of Buffalo online?

A: Q1 sales matched production, with additional capacity coming online, sales to build throughout the year, and backlog to be worked through in Q3 and Q4.

Q: On transportation and energy pass through, size of transitory headwind in first quarter, lag, etc.?

A: About a $3 million headwind in March, increased in April, but actions with customers to pass through costs already in place and expected to be completed in Q2.

Q: On Moisture Shield assets fit into decorator strategy and leveraging distribution partnerships?

A: Moisture Shield acquisition provided additional capacity, cool deck technology, and access to new distributor partners. Transition of Moisture Shield brand under Decorators umbrella planned for 2027.

Q: On wood plastic composite and surestone business, total business, capacity?

A: 2025 total decking and railing sales at about $245 million, with breakdown by product. Prior capacity for surestone and wood plastic composite, and after acquisition and expansions, capacity is expected to change.

Q: On decorators Q1 growth, other offsetting factors?

A: Railing was off 6%, and other product categories in the decorators business unit were softer.

Q: On construction site build price competition and competitive dynamics?

A: Site build is a tough part of the business with continued price competition, hard to pass along cost inputs, and tough environment due to geopolitical tensions, interest rate increases, etc.

Q: On M&A opportunities and capital allocation?

A: Pipeline is the best in five plus years, focused on growing through M&A, intent on putting liquidity to work in right opportunities