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CORRECTING AND REPLACING - UFP Industries Reports Best Quarterly Results in the Company’s History

Third Quarter Net Sales up 28 percent, Diluted EPS up 49 percent, EBITDA up 40 percent

/EIN News/ -- GRAND RAPIDS, Mich., Oct. 22, 2020 (GLOBE NEWSWIRE) -- In the release titled, "UFP Industries Reports Best Quarterly Results in the Company’s History" issued yesterday, Wednesday, October 21, 2020, we were informed by the client UFP Industries, Inc. (Nasdaq: UFPI), the figure "more than $70 million" in the sixth paragraph should be "more than $700 million." The corrected release follows:

UFP Industries, Inc. (Nasdaq: UFPI) today announced record sales of $1.49 billion and net earnings attributable to controlling interest of $77.2 million for the third quarter ended September 26, 2020. The company also reported record EPS of $1.25 per diluted share, a 49 percent increase over the same period of 2019. These are the best quarterly sales and earnings results in the company’s 65-year history.

“One of the many lessons I will take from 2020 is that UFP Industries has the business diversification, processes, and experienced team members to face serious challenges and continue to serve customers while delivering strong results for our stakeholders,” said CEO Matthew J. Missad. “So far this year, we faced a pandemic, shut-down orders that disrupted economic activity, a record increase in lumber pricing, supply constraints, wildfires, hurricanes and rail shortages. Despite that, our teams worked diligently to address shifting customer demands, managed inventory wisely, and delivered record results. When it comes to what we can achieve, they set the bar even higher. I want to thank each of our over 13,000 team members for their fantastic efforts. I’d like to also acknowledge an extraordinary American business leader, UFP’s former president, CEO and chairman, my early and lifelong mentor, Ambassador Peter Secchia, who died today. Peter, the architect of UFP’s remarkable early growth, would have been extremely gratified to see his legacy acknowledged and celebrated today with the reporting of the best quarter in the company’s history.”

UFP Industries’ third quarter unit sales grew 8 percent over the same period of 2019, almost entirely from organic sales increases. Unit sales to Retail customers grew 34 percent organically over this period, led by the company’s ProWood, Dimensions, Outdoor Essentials, and Deckorators product lines.

“At the beginning of the pandemic, no one in the industry predicted the growth we’d see in our Retail segment,” Missad said. “Although UFP Retail Solutions has benefited from higher lumber prices and the spike in consumer demand during the past several months, it was well-positioned for improvement even before the pandemic began. In addition to the extraordinary efforts of our team members, I credit our investments in new products and in our new management structure, which allows us to focus better on our customers’ needs, each market we serve, and launch new products and execute initiatives with greater speed.” New product sales grew 41 percent in the third quarter over the same period of last year.

Keeping with the new product focus, UFP Industries recently completed the acquisition of Fire Retardant Chemical Technologies, LLC (FRCT), the leading R&D company specializing in wood treating technologies such as fire retardants. The addition of FRCT will allow UFP to develop new technologies and value-added wood products for the company’s ProWood pressure-treated line, as well as for other customers.

UFP Industries continues to maintain a strong pipeline of acquisition targets and a disciplined approach to capital allocation. The company’s long-term credit facilities and cash currently provide more than $700 million in available liquidity. Additionally, today the company’s board approved a quarterly dividend payment of 12.5 cents per share, bringing the annual total for 2020 to 50 cents per share, a 25 percent increase over the dividends paid in 2019. The dividend is payable on December 15, 2020, to shareholders of record on December 1, 2020.

“This year has been a difficult year for many, and we hope that those who have lost businesses or livelihoods due to the lockdowns will soon be able to start their recovery. UFP has been very fortunate, and even with market headwinds and COVID-19 restrictions, our record performance has validated the confidence we have in our organization’s ability to execute. Our operations will take the lessons we’ve learned and turn them into improvement opportunities for even higher levels of performance. We know that when challenged, UFP employees answer the call and do great things.”

Third Quarter 2020 Highlights (comparisons on a year-over-year basis):

  • Net sales of $1.49 billion, up 28 percent due to a 20 percent increase in pricing and an 8 percent increase in units sold
  • Gross profits increased 29 percent to over $241 million for the quarter as our profit per unit sold increased substantially
  • Earnings from operations of $106.6 million were up 51 percent, and net earnings attributable to controlling interest of $77.2 million were up 49 percent
  • EBITDA of $125.7 million increased 40 percent

By business segment, the company reported the following third-quarter results:

UFP Retail Solutions

  • $700.5 million in net sales, up 76 percent over the third quarter of 2019. Unit sales increased 34 percent, with higher selling prices increasing sales by 42 percent. The following business units drove unit sales growth: Dimensions Home and Décor (unit sales up 57 percent); Deckorators (up 50 percent); ProWood (up 30 percent); and Outdoor Essentials Fence, Lawn and Garden (up 28 percent). Unit sales in the segment’s E-Commerce unit, which include sales through large online retailers, grew 94 percent.

UFP Industrial

  • $282.1 million in net sales, up 4 percent from the third quarter of 2019. Unit sales decreased 2 percent, while higher selling prices increased sales by 6 percent. Industrial unit sales showed steady improvement as the third quarter progressed, with year-over-year sales improving from 5 percent lower in July to 1 percent higher in September. The company has been focusing on providing more value-added products to customers in this segment.

UFP Construction

  • $447.1 million in net sales, up 0.4 percent from the third quarter of 2019, due to a 9 percent decrease in unit sales and a 9 percent increase in selling prices. Unit sales changes by business unit for the quarter are as follows: Factory Built (up 7 percent); Concrete Forming (down 2 percent), Site Built (down 8 percent), Commercial (down 37 percent). Unit sales for Site Built showed continued improvement during the third quarter as business conditions improved. The Commercial business unit has been the most adversely impacted by the pandemic due to the slowdown in retail and other commercial construction and remodeling activity.

CONFERENCE CALL
UFP Industries will conduct a conference call to discuss information included in this news release and related matters at 8:30 a.m. ET on Thursday, October 22, 2020. The call will be hosted by CEO Matthew J. Missad and CFO Michael Cole, and will be available for analysts and institutional investors domestically at 866-518-4547 and internationally at 213-660-0879. Use conference pass code 7497854. The conference call will be available simultaneously and in its entirety to all interested investors and news media through a webcast at http://www.ufpi.com. A replay of the call will be available from October 22, 2020, at 11:30 p.m. through October 24, 2020, 11:30 p.m. at 855-859-2056 or 404-537-3406.

UFP Industries, Inc. (formerly Universal Forest Products, Inc.)
UFP Industries is a holding company whose subsidiaries supply wood, wood composite and other products to three markets: retail, construction and industrial. Founded in 1955, the company is headquartered in Grand Rapids, Mich., with affiliates throughout North America, Europe, Asia and Australia. For more about UFP Industries, go to www.ufpi.com.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. The Company does not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in the price of lumber; adverse or unusual weather conditions; adverse economic conditions in the markets we serve; government regulations, particularly involving environmental and safety regulations; and our ability to make successful business acquisitions. Certain of these risk factors as well as other risk factors and additional information are included in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.

Non-GAAP Financial Information

This release includes certain financial information not prepared in accordance with U.S. GAAP. Because not all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly titled measures used by other companies. Management considers EBITDA, a non-GAAP measure, an alternative performance measure which may provide useful information to investors.


CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)  
FOR THE THREE AND NINE MONTHS ENDED  
SEPTEMBER 2020/2019  
    Quarter Period       Year to Date      
(In thousands, except per share data)   2020       2019       2020       2019        
                                   
                                   
                                   
NET SALES   $ 1,486,227     100 %   $ 1,163,026     100 %   $ 3,760,290     100 %   $ 3,417,969     100.0 %  
                                   
COST OF GOODS SOLD     1,245,153     83.8       975,756     83.9       3,147,049     83.7       2,889,706     84.5    
                                   
GROSS PROFIT     241,074     16.2       187,270     16.1       613,241     16.3       528,263     15.5    
                                   
SELLING, GENERAL AND                                  
   ADMINISTRATIVE EXPENSES     134,649     9.1       115,958     10.0       357,770     9.5       334,165     9.8    
OTHER     (176 )   -       845     0.1       (2,120 )   (0.1 )     948     -    
                                   
EARNINGS FROM OPERATIONS     106,601     7.2       70,467     6.1       257,591     6.9       193,150     5.7    
                                   
OTHER EXPENSE, NET     921     0.1       1,490     0.1       4,668     0.1       4,082     0.1    
                                   
EARNINGS BEFORE INCOME TAXES     105,680     7.1       68,977     5.9       252,923     6.7       189,068     5.5    
                                   
INCOME TAXES     26,819     1.8       16,396     1.4       63,798     1.7       45,340     1.3    
                                   
NET EARNINGS     78,861     5.3       52,581     4.5       189,125     5.0       143,728     4.2    
                                   
LESS NET EARNINGS ATTRIBUTABLE TO                                  
     NONCONTROLLING INTEREST     (1,657 )   (0.1 )     (722 )   (0.1 )     (5,299 )   (0.1 )     (1,814 )   (0.1 )  
                                   
NET EARNINGS ATTRIBUTABLE TO                                  
     CONTROLLING INTEREST   $ 77,204     5.2     $ 51,859     4.5     $ 183,826     4.9     $ 141,914     4.2    
                                   
                                   
EARNINGS PER SHARE - BASIC   $ 1.25         $ 0.84         $ 2.98         $ 2.30        
                                   
EARNINGS PER SHARE - DILUTED   $ 1.25         $ 0.84         $ 2.98         $ 2.30        
                                   
SUPPLEMENTAL SALES AND SG&A DATA                                  
    Quarter Period   Year to Date  
Segment Classification     2020           2019     %     2020           2019     %  
Retail   $ 700,522         $ 397,140     76.4 %   $ 1,661,873         $ 1,212,330     37.1 %  
Industrial     282,124           271,667     3.8 %     763,046           837,671     -8.9 %  
Construction     447,103           445,505     0.4 %     1,187,429           1,225,467     -3.1 %  
All Other     56,478           48,714     15.9 %     147,942           142,501     3.8 %  
Total Net Sales   $ 1,486,227         $ 1,163,026     27.8 %   $ 3,760,290         $ 3,417,969     10.0 %  
                                   
      2020     % of Sales     2019     % of
Sales
    2020     % of Sales     2019     % of
Sales
 
SG&A, Excluding Bonus Expense   $ 92,342     6.2     $ 93,344     8.0     $ 273,574     7.3     $ 280,898     8.2    
Bonus Expense     42,307     2.8       22,614     1.9       84,196     2.2       53,267     1.6    
Total SG&A   $ 134,649     9.1     $ 115,958     10.0     $ 357,770     9.5     $ 334,165     9.8    
                                   
SG&A as a Percentage of Gross Profit     55.9 %         61.9 %         58.3 %         63.3 %      



CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)  
SEPTEMBER 2020/2019  
                               
(In thousands)                          
ASSETS    2020    2019   LIABILITIES AND EQUITY    2020    2019  
                               
CURRENT ASSETS           CURRENT LIABILITIES          
  Cash and cash equivalents   $ 346,154   $ 64,498     Accounts payable   $ 231,111   $ 180,767  
  Restricted cash     724     729     Accrued liabilities     259,733     204,529  
  Investments     20,530     17,028     Current portion of debt     2,760     152  
  Accounts receivable     583,079     474,648                  
  Inventories     528,734     479,356                  
  Other current assets     32,888     55,845                  
                               
TOTAL CURRENT ASSETS     1,512,109     1,092,104   TOTAL CURRENT LIABILITIES     493,604     385,448  
                               
OTHER ASSETS     121,025     116,887   LONG-TERM DEBT AND          
INTANGIBLE ASSETS, NET     311,491     286,627     CAPITAL LEASE OBLIGATIONS     311,267     162,853  
PROPERTY, PLANT           OTHER LIABILITIES     131,945     103,221  
  AND EQUIPMENT, NET     405,995     385,007   EQUITY     1,413,804     1,229,103  
                               
                               
TOTAL ASSETS   $ 2,350,620   $ 1,880,625   TOTAL LIABILITIES AND EQUITY   $ 2,350,620   $ 1,880,625  
                               


CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)  
FOR THE NINE MONTHS ENDED  
SEPTEMBER 2020/2019  
(In thousands)   2020     2019    
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net earnings   $ 189,125     $ 143,728    
Adjustments to reconcile net earnings to net cash from operating activities:          
           
Depreciation     47,226       44,652    
Amortization of intangibles     5,863       4,690    
Expense associated with share-based and grant compensation arrangements     3,152       3,105    
Deferred income taxes (credit)     110       (367 )  
Unrealized gain on investments and other     (81 )     (1,611 )  
Net (gain) loss on disposition and impairment of assets     (662 )     830    
Changes in:                  
Accounts receivable     (211,238 )     (127,841 )  
Inventories     (39,167 )     80,178    
Accounts payable and cash overdraft     85,354       14,293    
Accrued liabilities and other     105,401       36,423    
          NET CASH FROM OPERATING ACTIVITIES     185,083       198,080    
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchases of property, plant, and equipment     (67,024 )     (66,338 )  
Proceeds from sale of property, plant and equipment     2,588       1,180    
Acquisitions and purchase of noncontrolling interest, net of cash received     (34,820 )     (38,710 )  
Purchases of investments     (24,266 )     (6,475 )  
Proceeds from sale of investments     22,281       4,159    
Other     314       199    
          NET CASH USED IN INVESTING ACTIVITIES     (100,927 )     (105,985 )  
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Borrowings under revolving credit facilities     6,862       421,464    
Repayments under revolving credit facilities     (6,498 )     (460,537 )  
Repayments of debt     (3,087 )     (3,099 )  
Issuance of long-term debt     150,000       -    
Proceeds from issuance of common stock     1,042       812    
Dividends paid to shareholders     (23,020 )     (12,270 )  
Distributions to noncontrolling interest     (932 )     (1,634 )  
Repurchase of common stock     (29,212 )     -    
Other     23       41    
          NET CASH FROM (USED IN) FINANCING ACTIVITIES     95,178       (55,223 )  
           
Effect of exchange rate changes on cash     (1,122 )     157    
NET CHANGE IN CASH AND CASH EQUIVALENTS     178,212       37,029    
           
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     168,666       28,198    
           
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD   $ 346,878     $ 65,227    
           
Reconciliation of cash and cash equivalents and restricted cash:          
Cash and cash equivalents, beginning of period   $ 168,336     $ 27,316    
Restricted cash, beginning of period     330       882    
All cash and cash equivalents, beginning of period   $ 168,666     $ 28,198    
           
Cash and cash equivalents, end of period   $ 346,154     $ 64,498    
Restricted cash, end of period     724       729    
All cash and cash equivalents, end of period   $ 346,878     $ 65,227    
           
           



EBITDA RECONCILIATION (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 2020/2019
    Quarter Period Year to Date
(In thousands)   2020 2019 2020 2019
Net earnings   78,861     52,581     189,125     143,728  
Interest expense   2,486     1,900     6,291     6,767  
Interest and investment income   (1,011 )   (317 )   (1,541 )   (1,074 )
Income taxes   26,819     16,396     63,798     45,340  
Expense associated with share-based compensation arrangements   849     896     3,152     3,105  
Net (gain) loss on disposition and impairment of assets   (391 )   1,151     (662 )   830  
Unrealized gain on investments   (554 )   (93 )   (82 )   (1,611 )
Depreciation expense   15,896     15,452     47,226     44,652  
Amortization of intangibles   2,734     1,744     5,863     4,690  
EBITDA   125,689     89,710     313,170     246,427  
                 


CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AS A PERCENTAGE OF SALES
CURRENT YEAR'S SALES STATED AT LAST YEAR'S SELLING PRICES (UNAUDITED)
FOR THE THREE MONTHS ENDED - SEPTEMBER 2020/2019
  Quarter Period
  Actual Sales Adjusted to
Last Year's
Selling Prices
Actual
    2020       2020       2019    
                   
NET SALES   100.0   %   100.0   %   100.0   %
COST OF GOODS SOLD   83.8       80.8       83.9    
GROSS PROFIT   16.2       19.2       16.1    
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES   9.1       10.7       9.9    
OTHER   -       -       0.1    
EARNINGS FROM OPERATIONS   7.2       8.5       6.1    
OTHER EXPENSE, NET   0.1       0.1       0.1    
EARNINGS BEFORE INCOME TAXES   7.1       8.4       5.9    
INCOME TAXES   1.8       2.1       1.4    
NET EARNINGS   5.3       6.3       4.5    
LESS NET EARNINGS ATTRIBUTABLE TO                  
     NONCONTROLLING INTEREST   (0.1 )     (0.1 )     (0.1 )  
NET EARNINGS ATTRIBUTABLE TO                  
     CONTROLLING INTEREST   5.2   %   6.2   %   4.5   %
                   
Note: Actual percentages are calculated and may not sum to total due to rounding.                  
                   
                   
2019 NET SALES $ 1,163,026                
2020 SELL PRICE INCREASE   20.00   %            
INCREASE IN 2020 NET SALES DUE TO SELL PRICE INCREASE $ 232,605                
                   
ACTUAL 2020 NET SALES   1,486,227                
LESS SELL PRICE ADJUSTMENT FOR LUMBER COSTS   232,605                
ADJUSTED 2020 NET SALES $ 1,253,622                
                   
ACTUAL 2020 COST OF GOODS SOLD $ 1,245,153                
LESS ADJUSTMENT FOR LUMBER COSTS   232,605                
ADJUSTED 2020 COST OF GOODS SOLD $ 1,012,548                
                   

 

---------------AT THE COMPANY---------------

Dick Gauthier
VP, Business Outreach
(616) 365-1555

 

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