UFP Industries(US:UFPI)2025-04-29 13:00Financial Data and Key Metrics Changes - Total sales declined 3% year-over-year to $1,600,000,000, driven by a 2% reduction in volumes and a 1% reduction in selling prices [24][26] - Adjusted EBITDA decreased 21% to $142,000,000, with an adjusted EBITDA margin falling to 8.9% [24][25] - Earnings per share for the quarter were reported at $1.30 [8] Business Line Data and Key Metrics Changes - Retail segment sales were $607,000,000, a 3% decline due to a 4% decrease in units, partially offset by a 1% increase in price [26] - Packaging segment sales dropped 3% to $410,000,000, consisting of a 3% decrease in organic units and a 1% decrease in selling prices [28] - Construction segment sales were largely flat at $516,000,000, with a 3% increase in units offset by a 3% decline in selling prices [30] Market Data and Key Metrics Changes - Retail sales experienced a 3% decline, primarily due to a 4% decline in volume, with a positive pricing impact of 1% [17] - The construction market outlook remains cautious, with many homebuilders lowering their full-year forecasts [20][22] - The company imports less than 15% of its lumber from Canada, with Southern Yellow Pine representing over 70% of lumber purchases [21] Company Strategy and Development Direction - The company plans to invest $1,000,000,000 in growth capital investments over the next five years, with a focus on organic and inorganic growth [13] - The strategy includes expanding value-added products and innovation while deemphasizing underperforming products [9] - The company aims for 7% to 10% unit growth and 12.5% EBITDA margins in the long term [22] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment has become increasingly uncertain, but recent business trends have shown improvement [5][6] - The company expects demand to remain slightly down across segments for the remainder of 2025, with competitive pricing pressures continuing [38] - Management remains confident in navigating potential tariff impacts and leveraging favorable demographic trends in an underbuilt housing market [22] Other Important Information - The company has a strong balance sheet with nearly $955,000,000 in cash and total liquidity of $2,200,000,000 [35] - A quarterly dividend of $0.35 per share was approved, representing a 6% increase from the previous year [35] - The company repurchased 649,000 shares for $70,000,000 during the quarter, with additional repurchases planned [36] Q&A Session Summary Question: Outlook on demand and competitive dynamics - Management expects current challenges to continue in future quarters, particularly in the packaging and construction segments, while retail may see improvements [43][44] Question: Impact of lumber prices and market share - The company aims to retain and grow market share while managing margins, with a focus on mitigating cost increases [50][51] Question: Decorators business and growth expectations - Management anticipates that the transition period affecting decorators is largely behind them, with expectations for year-over-year volume gains by the end of the year [55][61] Question: M&A opportunities and growth strategy - The company sees opportunities across all business units for M&A, with a preference for tuck-in acquisitions but open to larger transactions if the right opportunity arises [78][79] Question: Pricing mechanisms in ProWood and market conditions - Management indicated that pricing increases have been successfully passed along, and more normalized margins are expected moving forward [83][84]