UFPI UFP Industries Inc

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 11-K

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For the fiscal year ended December 31, 2022

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Commission file number:  0-22684

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UFP Industries, Inc. Employees' Profit Sharing

and 401(k) Plan

(Full title of the plan and the address of the plan, if different from that of issuer named below)

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UFP Industries, Inc.

2801 East Beltline NE

Grand Rapids, Michigan 49525-9736

(Name of issuer of the securities held pursuant to the plan and the address of its principal executive office)

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UFP Industries, Inc. Employees’ Profit Sharing and

401(k) Plan

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Employer contributions are subject to a vesting schedule as follows:

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The Plan was amended effective January 1, 2012 to be designated as an ESOP for those Participants with a portion of their account balance invested in the UFP Industries Inc. Stock Fund. This provision allows those Participants who are 100% vested the opportunity to elect to have the dividends on the employer stock fund paid to them in cash.

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Participant Accounts

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Participants may select from various investment options made available by the Plan. Each participant’s account is credited with the participant’s contribution, an allocation of the Plan Sponsor’s contribution, if any, Plan earnings and losses and certain administrative expenses. Earnings allocations are based on participant account balances, as defined in the Plan Document.

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Forfeitures

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Upon termination of employment, a participant may not be fully vested in the employer’s contributions that have been allocated to his or her account. Forfeitures are used to offset the Plan Sponsor’s matching contributions and for reasonable administrative expenses. During 2022 and 2021, forfeitures of approximately $1,218,000 and $1,244,000, respectively, were used to offset the Plan Sponsor’s matching contributions.

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Participant Loans

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Participants may borrow from their account a minimum amount of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance, reduced by any outstanding loans as outlined in the Plan Document. Loan terms range from one to five years or up to 25 years for the purchase of a residence. The loans bear interest at a rate equal to the prime rate (7.50% at December 31, 2022) plus 2% calculated on a daily basis. Interest rates on outstanding loans ranged from 4.2% to 11.5% at December 31, 2022. 

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Payment of Benefits

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Before attainment of age 59½, participants may request in-service withdrawals from the Rollover balance within their account. Participants may also request an in-service withdrawal from their Salary Deferral balance in the event of a financial hardship, subject to certain limitations as defined by the Plan.  Once a participant attains age 59½, in-service withdrawals may be made from all contribution sources.

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Upon separation from service, a participant is eligible for a lump sum distribution of their full, vested account balance. Participants may elect to receive the distribution in a lump sum amount, a qualified rollover to another plan, or may defer their distribution until a later date. However, in the absence of an election, if the vested portion of a participant’s account is $1,000 or less, this amount will be paid as a lump sum distribution as soon as administratively allowable. Participants who incur a separation from service as a result of their death, Total Disability, or Retirement will be vested at 100% prior to their distribution.

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Termination

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The Plan Sponsor intends to continue the Plan indefinitely, but reserves the right to terminate or amend the Plan at any time. In the event of termination of the Plan, all participants are automatically fully vested in the value of their accounts and will be paid in full.

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Basis of Accounting

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The financial statements of the UFP Industries, Inc. Employees’ Profit Sharing and 401(k) Plan are presented on the accrual method of accounting.

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Subsequent Events

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Subsequent events have been evaluated by management through June 14, 2023, the date these financial statements were available to be issued.

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Use of Estimates

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The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts. Although actual results could differ from these estimates, management believes estimated amounts recorded are reasonable and appropriate.

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Risks and Uncertainties

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The Plan utilizes various investment instruments. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the financial statements.

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Investment Valuation and Income Recognition

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The Plan’s investments are stated at estimated fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

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Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability.  The Plan utilizes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  The following provides a description of the three levels of inputs that may be used to measure fair value:

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Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

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Level 2 – Significant observable inputs such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable or can be derived from or corroborated by observable market data by correlation or other means.

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Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

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The following valuation methodologies were used to measure the fair value of the Plan’s investments:

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Common Stock: Valued at quoted market prices in an exchange and active market in which the securities are traded.

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Money Market Fund: Valued at quoted market prices in an exchange and active market, which represent the net asset value (NAV) of shares held by the Plan.  The money market fund seeks to maintain a $1.00 NAV.

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Mutual Funds: Valued at quoted market prices in an exchange and active market, which represent the net asset values of shares held by the Plan.

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Common Investment Trust (CIT): The fair value of participation units held in the Principal Stable Value Fund are based on net asset value, which is obtained from audited information reported by the issuer of the common collective trust at year-end and is used as a practical expedient. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported NAV. Investments held by a CIT are required to be reported at fair value, however, contract value is the relevant measurement characteristic for that portion of the net assets of a CIT attributable to fully benefit-responsive investment contracts. This is because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the underlying defined-contribution plans. There are no unfunded commitments relating to these investments.

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The investment objective of the Principal Stable Value Fund is to provide preservation of capital, relatively stable returns consistent with its comparatively low risk profile, and liquidity for benefit-responsive payments. Withdrawals from the Principal Stable Value Fund for benefit payments and participant transfers to noncompeting options are made to plan participants promptly upon request but in all cases within 30 days after written notification has been received.  All plan sponsor-directed full or partial withdrawals are subject to a twelve month advance written notice requirement, though the Principal Stable Value Fund may waive this requirement at its discretion.

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The UFP Industries Inc. Stock Fund (the Fund) is tracked on a unitized basis. At December 31, 2022, the Fund consists of common stock of UFP Industries, Inc. (Plan Sponsor) and funds that are held in the Allspring Government Money Market Fund that are sufficient to meet the Fund’s daily cash needs. Unitization of the Fund allows for daily trades. The value of a unit reflects the combined market value of the common stock and the Allspring Government Money Market Fund held by the Fund. At December 31, 2022 and 2021, 1,735,220 and 1,775,535 units, respectively, were outstanding with a value of $76.68 and $88.72 per unit, respectively.  

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The Plan’s valuation methods may result in a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  Although Plan management believes the valuation methods are appropriate and consistent with those participating in the market, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

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Purchases and sales of securities are recorded on a trade date basis.  Interest income is recorded on the accrual basis.  Dividends are recorded on the ex-dividend date.  Net appreciation and depreciation include the Plan’s gains and losses on investments bought or sold as well as held during the year.

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Notes Receivable from Participants

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Notes receivables from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent notes receivable from participants are deemed distributions based upon the terms of the Plan document.

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Payment of Benefits

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Benefits are recorded when paid.

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Concentration of Investments

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Included in investments at December 31, 2022 and 2021 are shares of the Plan Sponsor’s common stock with an aggregate fair value of $129,942,659 and $154,001,093, respectively.  This investment represents 25% and 26% of total investments at December 31, 2022 and 2021, respectively.  A significant decline in the market value of the Plan Sponsor’s stock would significantly affect the net assets available for benefits.

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Administrative Expenses

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Administrative expenses incurred in connection with the operations of the Plan are paid via certain investment and transactional fees which are borne by the Plan and applied to applicable participant balances. These fees are disclosed in the annual Fee Disclosure Notice and on individual account statements sent to all Plan participants. Substantially all of these expenses are paid to parties-in-interest of the Plan and are based on reasonable and customary rates for the related services. Certain administrative expenses not reflected in this report are paid directly by the Plan Sponsor.

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The tables below set forth by level within the fair value hierarchy the Plan’s investments as of December 31, 2022 and 2021.

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* The investment in the collective investment trust is measured at fair value using the net asset value per share (or its equivalent) as a practical expedient and has not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Statements of Net Assets Available for Benefits.

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The Plan Sponsor has received a determination letter from the Internal Revenue Service dated March 17, 2017, stating that the Plan is qualified under section 401(a) of the Internal Revenue Code (the Code), and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the Internal Revenue Service, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Sponsor believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt.

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Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service.  The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.

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Transactions resulting in Plan assets being transferred to or used by a related party are prohibited under ERISA unless a specific exemption is applied. Principal is a party-in-interest and qualified institution as defined by ERISA. The Plan also invests in the common stock of the Company, which it holds in the Plan. See Note 2 for additional information related to the Company’s stock. Notes receivable from participants are also considered party-in interest transactions. All of the above transactions are exempt from the “prohibited transactions” provisions of ERISA and the Code.

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There were no late remittances during the Plan year ended December 31, 2022. During the Plan year ended December 31, 2021, employee withholdings in the amount of $922,216, were not remitted within the appropriate time period by the Company. These transactions constitute prohibited transactions, as defined by ERISA. The 2021 members' contributions transferred late to the Plan have been fully corrected to make members' accounts whole during the year ended December 31, 2021.

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