Thank you for standing by, and welcome to the Q1 2022 UFP Industries Inc. Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker, Mr. Dick Gauthier, Vice President of Communications and Investor Relations. Please go ahead, sir. Welcome to the First Quarter 2022 Conference Call for UFP Industries. Hosting the call today are CEO Matt Missad and CFO Mike Cole. Matt and Mike will offer prepared remarks, and then the call will be open for questions. This conference call is available simultaneously in its entirety to all interested investors and news media through our webcast at ufpi.com. A replay will also be available at that website. Before I turn the call over to Matt Missad, let me remind you that today's press release and presentation include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the company's expectations and projections. These risks and uncertainties include, but are not limited to, those factors identified in the press release and in the filings with the Securities and Exchange Commission. Now, I would like to turn the call over to Matt Missad. Thank you, Dick, and good afternoon, everyone. It is an amazing time. The music's pumping, crowd's excited, and the UFP team is shouting, "Turn down for what?" Even with the macroeconomic and geopolitical party crashers, the team is executing their plans to keep the momentum going. They produced an unbelievable first quarter, which on its own is the third-best year in UFPI's 67-year history. I am extremely grateful for their efforts and proud of their ability to set new first-quarter records like these. Net sales of $2.49 billion, pre-bonus operating profit of $329.3 million, gross profit dollars of $478.4 million, and earnings per share of $3. We suspect many investors will be pleasantly surprised with these results. We've explained our balanced business model as well as our natural hedge against lumber market price fluctuations in the past, and the proof of these benefits is included in the record quarterly results. I will keep highlighting this message of diverse products, customers, and markets, which complement each other and make UFPI a unique and rewarding investment. The credit for our performance goes to our great UFP teammates, who continue to post these outstanding results. Investors may question how we continue to post exceptional numbers when the lumber market is so volatile. UFPI in 2022 is a different, more diverse company than it was 15 years ago or even 3 years ago. In the late 2000s, with our heavy concentration on retail and construction markets, we were less insulated from adverse effects of lumber market swings. Prior to our new structure, our operations were less cohesive for national customers, which created inefficiencies and other challenges. Today, with a much broader market presence in retail, construction, and industrial, we have a balance of customer types and pricing methods, which serves as a natural hedge. While the lumber market swings may impact part of our businesses, the other parts of our business act like a counterbalance. When we execute like we have, it works quite well, as you can see from the results. Of course, sales dollars will fluctuate with the overall lumber market, which is why we focus on unit sales and gross profit dollars per unit. You're probably wondering why I'm explaining this today when it is a concept most of you know. My reasoning is simple. We believe UFPI is a great long-term investment. I don't want you to wake up one day and say, "I wish that Matt had told me more about that UFPI opportunity." Regret can be tough, so I'm telling you now so you can avoid a case of FOMO in the future. To affirm our belief in the company's long-term value, we repurchased 800,000 shares so far this year, which nearly covers all of our issuances under our compensation and employee purchase plans in 2022, and the repurchase price was less than the issue price. We still have additional repurchase authorizations remaining, as well as ample capital. We'll talk more about capital allocation and future outlook in a few minutes, but first, let's review the individual segments. In the Retail Solutions segment, unit sales were up 12%, and gross profit dollars were up 34%. Our ProWood and Sunbelt units, with their concentration of variable-priced products, had a very nice quarter, as variable-priced products did well. Our purchasing and operations teams have done a very nice job at Sunbelt to reduce lumber market impacts too. Sunbelt also began production at its new facility in Sterling, Georgia, which provides a significant transportation advantage for the Savannah, Georgia, and South Regional market. It will also allow some more import and export advantages via the Port of Savannah. ProWood is adding a new ProWood FR fire retardant location in Q2, which will bring capacity nationally to 45 million board feet. The new two-hour fire assembly is expected to generate strong customer interest in the back half of 2022. UFP-Edge, our Siding Pattern and Trim business, grew unit sales by 7% in the quarter. They continue to add production capacity each week, but some manufacturing components for their new line are delayed, so full production capacity will not be achieved until Q4 of this year. Deckorators composite decking unit sales increased 5% in Q1, while plastic lattice and accessories saw declines. Demand for the mineral-based composite product continues to grow, and our additional capacity should be completed this year as scheduled. The Deckorators team is also scaling the new Ultra Aluminum product line into UFP's existing customer base, which is going very well. Handprint, the Home and Décor business unit, continues to grow and expand new customers with its cut-to-size product offering. The Outdoor Essentials product line continues to expand as well, and this spring, we are introducing the Haven collection of raised garden beds and planters. These are e-commerce-friendly designs using mixed materials with tool-free assembly. This is a great example of our core line innovation process, which takes old ideas, improves them, and makes them more easily marketable both in-store and online. UFP Construction unit sales increased by 15% in Q1, and gross profit dollars increased 82.7%. Our Site-Built business unit continues to benefit from strong demand. Engineered wood products, such as LVL, remain in short supply, but our design and engineering teams are using their expertise to redesign roofs and floor systems to utilize more readily available alternative products. Our Endurable acquisition now has the largest backlog in their history, and we continue to scale these and other new products, such as light gauge steel in new markets. In addition to the New England capacity, we have added light gauge steel in North Carolina and Tennessee. We also continue to perform more value-added services such as exterior envelope panels, which include both siding and windows. Our growth has been slowed by the lack of available labor in certain markets. While this is disappointing, we see other companies have a similar problem, which overall may help prevent overbuilding in the marketplace since the ability to deliver completed homes is moderated by the labor shortage. Our factory-built unit remains strong as manufacturers add capacity for more affordable small homes. Although not historically a big part of our business, recreational vehicle sales have slowed in Q1. While the recreational vehicle manufacturers remain optimistic, higher interest rates and higher gas prices will put additional pressure on the RV market. The Commercial Construction business unit is progressing as expected in 2022. Our concrete forming solution sales grew nicely in the first quarter. We continue to add talent to our team and expand our full service model to additional locations. Throughout the first quarter, we have seen very little impact from the federal infrastructure bill. UFP Industrial unit sales declined by 3%, while gross profit dollars increased 86.7%. As we discussed, unit sales comparisons are more challenged as the industrial team converts high volume, commodity-type sales to lower volume, but more value added sales. The growing value add component is evident in these results. In the structural packaging arena, our Strip- Pak corrugated and wood container is gaining more converts. This product line is easily scalable and gaining very good traction. We are also growing our structural steel components and packaging as well with our new Georgia facility coming online by the end of Q4. PalletOne is expanding machine-built pallet production outside the geographic areas they previously served. This was a key part of our scale and synergy plan, which is proceeding on schedule. We also continue to uncover more opportunities to improve. The protective packaging team is leveraging its recent acquisition of Advantage Label & Packaging and expanding the sales effort on labels and tags nationally. Our international group continues to show strength in Mexico, Australia, and in our recent acquisition in India. Timber sales from Eastern Europe, which are not material to UFPI overall, have been shut off due to the war in Ukraine, so our sourcing teams have been working hard to procure fiber from other parts of the world. Our European effort in Italy has been slowly rebounding as COVID restrictions have lifted, but their sales to Middle Eastern manufacturers have been slower and less profitable than anticipated. A key building block to successful innovation is new product introductions. Our new product sales in the first quarter were $151 million, which is well ahead of the pace necessary to hit our 2022 goal of $525 million. We also recognize the need to keep our new product pipeline full as we develop innovative groups of products with larger scale and application. We will be allocating additional capital for innovation fund, which will find or create new products with a high degree of intellectual property value and develop them to the point of commercialization with the help of our innovation accelerator team. Once commercialized, these products will be absorbed into the appropriate business unit or units. Historically, our operations have been reluctant to make these types of long-term investments, which can have an uncertain payback on a local level. This innovation fund can absorb these development costs, which are expected to be repaid at the time of commercialization. In the meantime, each segment will continue to invest in creating core line innovations and new products with rapid commercialization potential. With a great first quarter now behind us, what's the outlook for the balance of the year? First, new home construction is expected to plateau in Q3 and Q4, given higher interest rates and inflation, which impact affordability and may influence whether more projects are multifamily versus single family. Current trends show multifamily starts up significantly, and we are well-positioned to succeed because we serve both single-family and multifamily customers, and because the majority of our facilities are in geographic areas which are projected to have strong population growth over the next decade. The repair and remodel market, which is a good guidepost for retail big box, remains solid and is in line with pre-pandemic levels thus far. With lack of available housing inventory and homeowners having increased equity in their homes, repair and remodel becomes a more attractive option versus moving. Big box and independent retail customer feedback indicates that northern markets have started slower with a delayed spring in many areas, while southern markets have performed as expected so far. Pull through in Q2 will be a key data point for the back half of 2022. Durable goods manufacturing was down slightly through February but remains solid for our industrial customers. Many manufacturers continue to work through their supply chain issues, which tends to extend order files. The Manufactured Housing Institute is predicting another strong year with extended lead times, while the RV market lags, as I mentioned. These highlights point to a good, solid 2022, which is a very positive environment for us to operate in. Obviously, not everything in the forecast is moonbeams and butterflies. There are some challenges and a few headwinds, but I'm confident our teammates will navigate them as well as anyone. Just a couple of factors that will challenge us. The first is inflation. Wages, benefits, consumables, resins, metals, and commodities are all seeing cost increase. We are doing our best to pass these costs along, yet at some point, the total of these costs are likely to slow growth. Interest rates. We're hopeful that the Fed will exercise due caution and restraint when raising rates. We hope they don't repeat history by raising rates too fast without allowing the typical 3- 6-month lag between Fed decision and reaction in actual businesses. In either scenario, UFP's strong balance sheet will allow us flexibility to take advantage of opportunities in the marketplace to strengthen our long-term value. Labor is another challenge. We continue to employ creative solutions and look for new ones to increase our applicant pool and encourage people to come back into the workforce at UFP. Our spring hourly bonus was very well-received, and we plan to incorporate some type of additional annual incentive as part of our permanent hourly incentive plan. Transportation remains a challenge from both an expense standpoint and availability. Rail and ocean freight have improved slightly, while trucking has remained spotty depending on geography. We have provided extra incentives to our truck drivers for their service, which is helping with recruiting and retention. The last challenge is around SEC and other regulatory disclosures and requirements. The SEC has proposed disclosure rules around topics for which there is no legislative requirement. The regulatory changes and additional requirements continue to increase our non-value-added expenses. These expenses, coupled with potential tax increases, could have a negative impact on earnings in the future. As always, UFP will face the challenges head-on and keep our focus on protecting and enhancing long-term shareholder value. One of the most important ways to combat the headwinds is through effective allocation of capital. We prioritize capital on growth, creating long-term value, and providing a solid return to our shareholders. Our growth capital is directed to strategic acquisitions, new products and services, expansionary and efficiency capital expenditures. We have plenty of acquisition targets in the pipeline, but we'll keep our disciplined approach and adjust our model consistent with our view of the future, which is consistent growth, albeit at a slightly lower growth rate than 2020 and 2021. Our return of capital to shareholders takes three forms. Share repurchases, cash dividends, and increase in share value. The performance of the UFP team delivered significant dry powder to pursue these shareholder returns. In addition to the share repurchases, we believe that a consistent and growing dividend adds value to our shareholders and are pleased to report that our board authorized an increased dividend of $0.25 per share payable on June 15 to shareholders of record June 1. As for increasing the share value itself, we plan to keep demonstrating our performance as well as enhancing our marketing effort to attract new investors who may be skeptical of the complexities of our company and may simply not know enough about us to make an investment. Now I'd like to turn it over to Mike Cole, who will provide more details on our financial performance. Thanks, Matt, and good afternoon, everyone. Our consolidated results this quarter are highlighted by 10% unit sales growth, including 3% organic, 80% adjusted EBITDA growth, EBITDA margin expansion of 280 basis points to 11.7%, a trailing 12-month return on invested capital of nearly 30%. A strong balance sheet with net debt to EBITDA less than 0.5 times, despite being at a seasonal peak for investments in net working capital. Now I'll walk through the financial statements for the quarter in more detail, starting with our sales by segment. Sales to the Retail segment increased 31% and consisted of a 19% increase in selling prices, unit growth from acquisition of 14%, a 3% decrease due to the transfer of certain sales to our Construction segment as we continue to try to align business optimally in our segments, and organic unit growth of 1%. In Retail, we anticipated tough organic growth comparisons this quarter. As you might recall, in the first quarter of 2021, orders from our Retail customers were exceptionally strong and then significantly tapered off later in Q2 and Q3 when the economy opened up and consumer spending shifted. Looking forward, year-over-year comparisons in Q2 and Q3 should be more favorable. I should also point out that organic growth varied by business unit as increases in UFP-Edge and retail building products were offset by declines in our other business units. As a reminder, our Deckorators business unit includes a variety of other products besides composite decking. Sales of accessories such as plastic lattice, railings, and post caps reported a decline of 13%, while our composite decking unit sales increased by 5%. Our ability to expand capacity contributed to our unit increases in Deckorators decking and UFP-Edge as we were able to better meet strong demand for our products. Looking forward, the investments we've made in these business units provide the capacity to add $100 million of annual sales. Lastly, our acquisition unit growth this quarter includes Ultra Aluminum, which was purchased in early January. Ultra is a high-end manufacturer of aluminum fence and railing systems, which fills an important gap in our product portfolio. Sales to the Industrial segment increased 36%, which includes a 39% increase in selling prices as we continue to improve our value-added product mix, execute value-based selling initiatives, and maintain pricing discipline. Our unit sales from acquisitions increased 1%, including the impact of our purchase of Advantage Label. Consistent with our discussion last quarter, organic unit growth declined 4% due to capacity constraints and as we continue to be selective in the business we take in order to focus on higher-margin, value-added products. Strong execution of this sales strategy again resulted in a tremendous improvement in our gross profits, which I'll review shortly. The components of our change in organic unit sales includes market share gains associated with $36 million in sales to new customers, $18 million of sales to new locations of existing customers, and $22 million of new product sales demonstrating the balance of our organic growth channels. These gains were more than offset by the intentional loss of unit sales on less profitable accounts. Our sales to the Construction segment increased 41%, consisting of a 26% increase in selling prices, 3% growth due to the transfer of business from Retail, 11% organic unit growth, and a 1% contribution from acquisitions. Organic unit growth was driven by a 13% increase in concrete forming, a 30% increase in commercial, and a 16% increase in factory-built housing. Capacity constraints in our Site Built business unit remain a challenge, so we continue to focus on being selective in the business we take and exercise pricing discipline. Order files and backlogs of each business unit remain strong. Moving down the income statement, our first quarter gross profits increased by $192 million or 67% and significantly outpaced our 10% increase in unit sales as our profit per unit improved. By segment, Industrial's gross profit increased by $69 million or 87%. Besides acquisitions, which contributed $2 million of the increase, value-based selling and favorable changes in product mix were the primary drivers for the increase in gross profits. Construction's gross profit increased by $73 million or 82%, led by a $37 million increase in Site-Built as strong demand has allowed us to be more selective in the business we take, and a $25 million increase in our factory-built business unit as strong organic growth has given us the ability to leverage fixed costs. Our Concrete Forming business unit increased its gross profit by $8.5 million, which includes $3.8 million as a result of the transfer and sale of sales from Retail. Retail increased by $34 million or 34% for the quarter, including acquisitions which contributed $12 million to the increase. The remaining increase was primarily driven by Edge and retail building products totaling $8 million, ProWood and Sunbelt totaling $12 million, and Deckorators totaling $3 million. Continuing to move down the income statement, our SG&A expenses increased $70 million, including $5 million from recently acquired businesses. The remaining $65 million increase consists of a $33 million increase in bonus expense, a $13 million increase in sales incentives, a $10 million increase in wages and benefits, and a $3 million increase in travel costs. Sequentially, our SG&A increased from $178 million in Q4 to $220 million in Q1, primarily due to bonus expense as a result of an increase in our pre-bonus operating profit, wages and benefits, and sales incentives driven by an increase in our gross profits. Finally, our operating profits increased nearly $122 million, driven by a $46 million increase in construction, a $42 million increase in industrial, and an $18 million increase in retail. Acquisitions contributed $9 million to the operating profit increase in retail and $1 million to the increase in international. Moving on to our cash flow statement. Our cash flows used in operations for the quarter was $248 million and consisted of net earnings and non-cash expenses totaling $228 million compared to $128 million last year. A $476 million increase in net working capital since the end of last year compared to a $325 million increase in the prior year. We measure our cash cycle to assess our working capital management, and it increased to 53 days this year, which is consistent with our historical trends, but 5 days higher than last year due to an increase in our days supply of inventory to ensure we meet our customers' delivery expectations. Our investing activities included capital expenditures of $29 million, including expansionary and efficiency CapEx of $15 million, and we invested $25 million on previously announced acquisitions. Finally, our financing activities included $102 million on net borrowings on our revolver to support seasonal investments in working capital and $13 million of dividends paid this quarter. With respect to our balance sheet, at the end of March, our total debt net of cash was only $410 million compared to $965 million in trailing 12- months EBITDA. Our total liquidity was $445 million. I'll finish up with comments about our capital allocation plans. The strength of our cash flow generation and conservative balance sheet provides us with plenty of capital to grow our business and also return to shareholders. We continue to pursue a balanced and return-driven approach. Specifically, our board just increased our quarterly dividend to $0.25 a share, representing a year-over-year increase of 67%, reflecting our confidence in our future business outlook. We continue to consider our payout ratios and yields when determining the appropriate rate and are pleased to once again raise our dividend. At the end of March and so far in April, we've repurchased 800,000 shares of our stock at an average price of about $77.50 a share under our 10B5-1 share repurchase plan. You'll notice on the cash flow statement that only $500,000 of this spend occurred in fiscal March, with the remaining $62 million spent in fiscal April. We have remaining authorization to repurchase another 1.8 million shares. Moving on to growth, we're continuing to target CapEx of $175 million-$225 million. Priority continues to be given to projects that enhance the working environments of our plants, take advantage of automation opportunities, and drive strategies that have strong long-term growth potential of new and value-added products. Notable projects include investments to expand UFP-Edge geographically, enhance automation, and expand the capacity of our machine-built pallet and other structural wood packaging operations, enhance automation, and expand the capacity of our site-built operations, including geographically, and expand our transportation fleet to meet our customers' needs. Lastly, we continue to pursue a healthy pipeline of acquisition opportunities for companies that are a strong strategic fit with high return and growth potential. That's all I have on the financials. Matt? Thank you, Mike. Now I'd like to open it up for any questions you may have. Our first question will come from Stanley Elliott with Stifel. Please go ahead. Hey, Matt, Mike, and Dick. Thank you guys for taking the questions. Hi, Stanley. How are you doing? Quick question, I guess, starting off. Thinking about the SG&A on a dollar basis going forward, I mean, I get the inflation, the wages. Will those $46 million of incentives continue across the year? I know you mentioned something about a balanced bonus program at the end. Yeah. The way that I would look at SG&A, Stanley, is I'd roll off of the Q1 numbers. Those. All of our wage increases or raises for salaried employees in particular happen in Q1. A lot of our headcount increases have already occurred and acquisitions were completed as of the beginning of the year. It's a good number to roll off of. Then what I would do is I'd model in increases associated with bonus expense in future quarters, and I'd model in increases in sales incentives in future quarters. The way that I would do that is we accrue roughly 20% bonus expense on pre-bonus operating profits. To whatever extent you model operating profits increase in future quarters, that's how I would handle the bonus expense. If you have gross profit changes, sales incentives are about 5% or so of gross profits. Perfect. Then, thinking about the single-family versus the multifamily dynamic going on right now, I imagine obviously more volume going into the multifamily. Is one more profitable for you all than the other? Just curious, kind of thinking about those markets, individually. Yeah, I think that's a good question, Stanley. What I would tell you is that multifamily tends to be multi-story, so you're gonna have probably fewer roofs, relatively speaking, per floor system. That would probably be the biggest area that I would say, but I think the multifamily projects allow you to get more efficient in your manufacturing as well. There's a bit of a trade-off, but I would say volume per unit in a multifamily is lower than it is in a single family. There are some efficiencies that you can make up on the manufacturing side. I guess last for me, you know, you mentioned a very active M&A landscape right now. Given your thoughts or concerns I guess some might have on where we are in the residential cycle, how are you all thinking about managing the balance sheet? You mentioned sub-five on net debt EBITDA base, it's very comfortable. But just curious kinda how you're thinking about leverage levels. Yeah. We continue to value a conservative balance sheet, and we continue to plan to reserve plenty of dry powder for the future. I don't think anything's changed with respect to how we're thinking about our capital structure. We'll be continuing to be conservative going forward. As you know, the types of transactions we get an opportunity to participate in tend to be smaller transactions. The larger transactions tend to trade at multiples that we feel make it difficult to earn a reasonable return on investment. We tend to play at the smaller end of the transaction size type with opportunities to scale it up and take something from 10 million- 100 million. That's kinda how we think about things and how we go about our business. Yeah. Should be another good cash flow year, so can fund a lot out of that. I'll hop back in the queue, to let others get some questions in. Thanks so much. Thanks, Stanley. Thank you. Our next question will come from Reuben Garner with The Benchmark Company. Please go ahead. Thank you. Good evening, everybody. Hey, Reuben. Hi, Reuben. Let's see. The industrial gross profit improvement pretty impressive yet again with volume organic volume or unit growth off a little bit. Can you just talk about how much more runway there is there in terms of your ability to mix or shift your mix? Is there a point where we're kinda anniversarying the start of some of these changes and maybe that the rate of that change slows down substantially? Yeah, I think that's a great question, Reuben. I can't really give you a specific answer, but I can tell you anecdotally that we still think there's a lot of runway left in converting what I call the sticks and panels type sale to the more value-added sale. I know the team is doing a great job of doing that today, but I think they would definitely echo the fact that there's a lot of opportunities yet there. Is it gonna be an exponential from where we are? Probably not, but it will definitely be a continued effort, and there should be continued runway on it. Matt, can you tell us where? Just to throw a number to it, Reuben. Yeah. I think we track and disclose our value-added sales by segment in the 10-Q. I wanna say it's between 70%-75% value add, so there is still quite a bit of runway to get to. I'd be happy at a 100. There's still a little bit of runway with that kind of a goal. Where was that number a couple years ago, Mike? Was that disclosed, kind of pre-pandemic or did the business unit changes, Yeah. I wish I could answer that for you. The reason we have it now is because of the change in structure. I don't have that available, you know, pre-2020. Okay. Got it. Let's see. Matt, your comments about maybe a plateauing of the new housing market. It doesn't sound like that's changing your outlook on your CapEx spending. Is there a point where I'm sure there is a point, but are we nearing a point where you know, the rise in rates would concern you enough to not move forward with additional capacity on the Site Built side? Yeah. I think where we're putting capacity, Reuben, is in the areas that we think there's gonna be continued growth over the next decade there. Whether it's population shifts or other reasons, we're very comfortable in the markets we're in, and trying to add additional capacity there is important to us. I would tell you that even if housing were to be more flat year-over-year, that's still a really good market for us and a good size market for us. For us to be able to produce more for the growth markets that we're in, I think we're committed to that long term. Okay, great. I'm gonna sneak one more in. Last year, in the second quarter, the pricing action in lumber, I think, was pretty similar to what we're seeing here the last few weeks or so. Should we expect kind of similar impact on your gross profits in the retail division? Are there any differences to think about on a year-over-year basis, Mike, that would change kind of. I mean, I think the rate of change is roughly comparable, but any other thoughts or comments? I know you guys haven't, you know, your acquisitions to layer in fully this year. Maybe there's some difference there. Yeah. Before Mike jumps in, Reuben, I just, I'll remind you that I made a comment about what the team had done at Sunbelt, which I think was a really good thing in terms of strengthening their position in the marketplace and insulating themselves a little bit from market fluctuations. So I think that would be a difference that would be in a positive direction, but Mike can probably give you more detail. Yeah. The only thing that I'd add onto that is just the severity and the time period of the drop, right? Last year, it was a pretty severe drop that happened pretty quickly, and that obviously had a real tough impact on retail. You might recall we did a pretty significant lower of cost or market write-down on retail last year. That would be one factor. But one thing to mitigate, and Matt kinda referred to it, is the impact we've been able to have, the team's been able to have from owning Sunbelt and Spartanburg for the year. One of the positive things that we've been able to implement there is vendor-managed inventory. That is something that helps us, you know, mitigate the impact of a drop in the lumber market like that. Last year, they didn't have any vendor-managed inventory. This year, they've incorporated that into their mix. It should help. Great. Congrats again, guys. Thanks for answering the questions. Thanks, Reuben. Thanks. Thank you. Our next question will come from Kurt Yinger with D.A. Davidson. Please go ahead. Great. Thanks, and good afternoon, Matt and Mike. Hey, Kurt. Hey, Kurt. Hey. I just wanted to start out on the Site-Built side. I mean, still positive in the quarter and up against a tough comp, but maybe a bit softer than I would have thought. How much of that do you think was impacted by your own capacity constraints? Second, could you just give a bit more color on backlogs heading into Q2 and whether you're seeing or hearing any changes in body language from customers that, I guess, would make you think that the back half could be a little bit flatter, or if that's just kind of your own, I guess, expectation based on everything you've seen? Yeah, Kurt. I think what I would tell you is if we had more labor, we could have produced more. You know, the capacity, we're not able to utilize our entire capacity simply because of labor. So that definitely is an issue that has impacted our ability. I will say the outlook from our customers has been very strong. The outlook from our leaders in that team has been very strong. When I reference, you know, housing flattening off in Q3 and 4, that's more from the big picture economists that are out there talking about it than it is from our internal belief. I think, again, the regions that we are in, that we do business in, we have very good lead times that are extended beyond what they typically would be. I know for multifamily, in particular, we're out into 2023. I think our team feels very good about it, and I think to the extent some of the labor can free up and we can get more people to come join our team, that would be a benefit. Got it. Okay. That, that's helpful. You know, recognizing that the construction gross profit dollar growth is still very strong, I mean, did start to see gross margins maybe moderate a bit after you know, some really meaningful improvements last year. Is there anything within that that you would maybe attribute to mix impacts within the different markets or any sense that the ability to reprice or leverage pricing with customers is getting more difficult than it was last year? Yeah. I think there's a lot of things built into that question. If I understand it, you talked about maybe mix change having some impact. I think at this point, there hasn't been any significant change in our ability to provide the product. The customers have been very forthcoming about needing to have product. As long as the volumes remain reasonably where they are today, I would expect that to continue. You know, we've been around long enough. If it was a different situation overall, economics-wise, it would be a different situation, probably the pricing. I think our teams have done a great job of building in value and being aware of the value they provide. Comparing that with what could be done in a stick-built basis on site, we still provide an excellent value. I think that pricing authority, I'll call it, is not really based solely on just what the market will bear. It's based on the value that we're providing. Got it. Okay. That's helpful. On the retail side, you know, could you just remind us the timing around the capacity investments that you've made in Deckorators and when you're kind of full force there on volumes? You know, looking at the divergence in decking versus accessories growth the last two quarters, any high-level thoughts on that? I mean, kind of recognizing that maybe the decking side was a little bit more capacity constrained, and so that's one variable. It still just seems a bit odd that the two are so different. Yeah. I think it's probably more product-specific, Kurt, than anything. We talk about plastic lattice, for example. That product category has basically suffered more. From our perspective, the decking has been capacity constrained. To answer your question there, I believe the mineral-based composite expansion should be complete substantially by the end of Q2. You have the normal ramp-in period. I'd imagine mid to late Q3, we'd be able to have the production capacity available. And with respect to the wood plastic composite that's in process today, again, probably later into Q3 when that gets completed and it'll be in place for, you know, sometime in Q4 will be fully functional. That's the current plan. Got it. Okay. Thank you. On ProWood, how much of the softness in volumes there the last couple of quarters would you kind of attribute to consumer pullback, given the elevated pricing environment versus, I guess, what you kinda think about underlying DIY deck and fence kind of project activity overall? Yeah, that's a good question, and I don't know that I have a really good answer for you in terms of how much is based on just pricing being high versus some kind of structural change in the market. I still think the product is going to be in a strong demand, probably a hyper demand in 2020 and a little bit into 2021. I think it's kind of returning to more of a normalized demand cycle. Mike, I don't know if you have anything to add on the pricing issue, whether that's a deterrent. You know, that makes sense to me. We feel like we saw that early in 2020, where in early 2021 prices just got so high, you know, the projects just got deferred. Okay. All right. Well, appreciate all the color, guys, and I'll turn it over. Thanks, Kurt. Thank you. Our next question will come from Julio Romero with Sidoti. Please go ahead. Hey, good afternoon, everyone. Hi, Julio. Hi, Julio. In the Industrial segment, can you just speak to how much of a driver PalletOne has been for industrial? Obviously, for the machine built pallets, it's been the driver for that product line. They've also done a terrific job both working with our existing industrial facilities and our industrial facilities working with them. There's been a sharing of customers and opportunities. As I mentioned, we're adding equipment in other locations outside the PalletOne geography that the UFP Industrial team's been able to help with. We've basically been able to accelerate their expansion plans, and they've really been a significant piece of that industrial growth. I don't wanna take anything away from the structural packaging aspect of it, which to me has been outstanding in terms of how they've built up their product lines, how they have become much more of a solution provider, and how they've demonstrated to the customers the value they're bringing. I would say that is a bigger driver, but PalletOne has really been a significant impact. Got it. I appreciate the color there. I guess more broadly across the portfolio, if you could just speak to pricing power and how you feel about your ability to continue to expand pricing per unit over time? As a vendor, I'm going to make an assumption that I have very little pricing power. Our goal is to make sure that we provide the highest value we can to our customers. We have to have a value proposition that makes sense for them, and our goal is always to have a better value proposition than our competitors do, so that would merit a higher price for our products. That's about the best I can tell you there, Julio. Understood. Thanks very much for taking the questions. Thank you. Thank you. Our next question will come from Jay McCanless with Wedbush. Please go ahead. Hey, good afternoon, guys. Thanks for taking my questions. Hey, Jay. Matt, the first one I have is, where do you think your capacity utilization was in 1Q 2022 versus last year in 1Q 2021? Outstanding question. Are you talking overall, or are you talking about a specific- Yeah. Just overall. Boy, that's really, really hard to say simply because of the total difference. I would tell you just kind of anecdotally in my visits to our facilities, there are very few, if any, that have been able to fully staff a second shift, and that's kind of my measure of capacity utilization. If you can fully staff two shifts, you're pretty much at functional capacity. whether it's- Is that, I mean, how does that compare to last year? I would assume with COVID being Yeah. I'm sorry, Jay, you cut out there. I think if the question was, how does it compare to 2021, has there been a little bit better labor situation? I would say yes, it's a little bit better, but it's only in the margins. It's not as significant. It's not like a 10% increase in capacity utilization. I think where we've gotten the extra capacity is from organic growth, adding more equipment in that's been more efficient and drives more volume that way. I think labor is still probably the governor on our ability to continue to expand capacity. Okay. The point of the question, I mean, I know optically lumber pricing was up. That's gonna help drive a higher gross margin, but I didn't know if it was more an increase in capacity utilization or some of this pricing rationalization that you guys have done in industrial and construction to drive such a I mean, I think it's the highest gross margin, quarterly gross margin you guys have had in the last 6 or 7 years. So that's mainly where I'm trying to get to is it more about the pricing actions versus being able to produce more goods? Yeah, I don't think it's too much of it. It may be a little bit, but I don't think a lot of it is based on operating leverage that we picked up from additional capacity utilization. Okay. Thank you for that. My second question, Mike, can you give that SG&A dollar breakout from 4Q 2021 to 1Q 2022 again, please? Yeah. I think our actual was $178 million, and it's this quarter $220 million. When Stanley asked about going forward, that's where I made the comments to build off of Q1 because it's most representative of where we're at. It's a good starting spot. Modeling and bonus increase at 20% of pre-bonus operating profit changes going forward, and then sales incentives at 5% of gross profit changes going forward. Gross profit change. No, that's on gross profit dollars, correct? Correct. I guess the other one I had for Matt is, you know, I keep hearing from different people that this engineered wood shortage just isn't getting any better. I guess could you maybe give us a little backstory on that and what the manufacturers are telling you as to when we might see an improvement there or even, you know, an inflection on when that availability is gonna start to improve? Yeah. I think if they're able to get some more capacity online, and again, anecdotally, I would say that they've had some of the same labor challenges too, which has been somewhat of a limiter on what they've been able to produce. There's little pockets where they have said, yeah, it's getting a little bit better. Still not enough. Again, we're trying to utilize that situation, our ability to design and engineer kind of around some of those products using some of our alternatives and meeting the customer's need that way. I don't have a great answer that is consistent from the producers other than to say it should get better. I just don't know when. Got it. I did have one other one, sorry. On the Concrete Forming business, I know you said in the prepared comments you haven't seen any blip up in business yet from the infrastructure bill, but when might we expect something along those lines? What's your team thinking there? Yeah. I think, in the conversations with our customers, they're basically pointing to the fact that, the bill itself or maybe, you know, somewhere in the neighborhood of a sixth of it is really truly concrete-related infrastructure projects. Of those, the bulk of it is, you know, repairing bridges and roadways. From the products that we provide, we don't do a whole lot for those types of products. New bridges, water filtration plants, of which there's a few, those are where we'll benefit. I still think we'll see some benefit out of it, but it's not as if, you know, $100 billion is gonna go into the products that we provide product to. Got it. Okay. Great. Thanks, guys. Appreciate it. Thank you. Thanks, Jay. Thank you. Our next question will come from Ketan Mamtora with BMO Capital Markets. Please go ahead. Good afternoon, and thanks for squeezing me in here. Hi, Ketan. Just first question, Matt, when I sort of. You know, obviously, balance sheet is in a great shape. You talked about the, you know, the M&A pipeline being good. As you look at the three segments, has the relative sort of attractiveness of any one, you know, of those segments kind of changed, you know, in the last couple of years as you think about, you know, growing each of these, you know, different segments, both organically versus kind of inorganically? Ketan, I guess I'd tell you I have three kids, and I love them all. Are there days when you like one better than the other? For sure. I think they all have great potential, and they have their own runways designed, and we all have a similar goal in mind, which is to improve our overall EBITDA percentage. I think they're all making really good strides towards that. We will take a look at the market. We'll take a look at the opportunities, and that's one of the things that Mike and his team work on when they talk about allocating capital, which particular investment has the best return. We do that regardless of which business unit or segment it's in. I think that's the way that we look at allocating capital, and that kind of gets you to the same spot you're talking about. You know, I love all my kids. Understood. Matt, where would you say, though, you have kind of the most opportunity to grow? Is it fair to say it's still on the industrial side? Yeah, I think if you were sitting in the meetings with our team, they all have opportunities to grow. There's a very clear path on the industrial side to go much bigger. I think other ones may have a little longer pathway to get there. Yeah, I would say industrial certainly has a clear path towards growth. Understood. That's helpful. You know, Mike, when I look at sort of the inventory position, sort of in the balance sheet, you know, it's a pretty big jump year-over-year. I suspect some of it is, you know, sort of higher prices, some of it is, you know, M&A driven. I'm just curious, kind of as you look to the spring construction season, kind of, you know, with lumber pricing starting to ease, you know, although from very healthy levels and kind of, you know, look at your inventory position, how would you sort of characterize it, you know, for where you are at the end of Q1? Well, I think we're very comfortable with our inventory levels at the end of Q1. As we've indicated, demand and order files are all good across really all of the segments. I feel like our inventories are in really good shape. Got it. Okay, that's helpful. Mike, would you have the bonus expense number handy for, you know, Q1 2022 out of that $220 million of SG&A? Yes, I do, Ketan. Hold on a second. Total bonus expense was $69 million in Q1 of 2022, and it was $37 million in Q1 of 2021. Perfect. That's very helpful. Then just one last question on the Deckorators side. You know, I know sort of the revenues, the sales, and I'm talking about just the composite decking side, you know, sales were up 5%. You know, I would have thought with some of the price increases that we've had over the last, you know, call it, you know, 12- months, I would have expected that number to be, you know, even higher. Are there seasonal components to it? Is there anything else, you know, from a sort of inventory position in sort of the channel? Is there anything else that you guys would point to? Yeah. I think, Ketan, there's certainly timing issues that come up. I think some of the pricing is set ahead of time. We've tried to add in some additional material costs. I don't think all of the pricing will have been baked in in Q1. So I think those things will improve, if you will. Overall, though, I think the market is strong. The demand for us is still strong. But I think part of this is the additional capacity that we have coming online isn't fully up to speed yet. It usually takes a little while to get it involved. As that comes on, our capacities will improve and increase. I don't know if, Mike, do you have anything to add there? Yeah. The sales, the 5% that you were quoting, Ketan, that's unit sales. Yes. Price increases would be on top of it. I see. Okay, perfect. No, that's very helpful. That's all from my side. Thank you. Thank you, Ketan. Thanks, Ketan. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to management for any closing remarks. Well, like Miguel Cabrera, we're off to a great start in 2022, and we will be pushing hard to continue this success and to break more records. I personally couldn't think of a better team to be a part of with the experience and the expertise to navigate the hurdles and to exploit the opportunities ahead. Each of our business units has a solid growth plan and is generating excitement for their own future opportunities. We know in 2022 we will definitely innovate and broaden and strengthen the foundation of our company to create even more shareholder value in the future. We also know that fear is a greater motivator than greed, and fear is definitely driving many investment decisions today. As a solutions provider, our goal is to help you redirect your fear to drive better economic results. What is our antidote for FOMO? It's UFPI, of course, and it is available each trading day on Nasdaq. Thank you for your time today, and thank you for your investment in us. Have a great day. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.