News Releases

UFP Industries Reports Record Sales and Profits for First Quarter

April 22, 2020 at 4:41 PM EDT
Diluted EPS up 12 percent, unit sales up 5 percent

GRAND RAPIDS, Mich., April 22, 2020 (GLOBE NEWSWIRE) -- UFP Industries, Inc. (Nasdaq: UFPI) today announced record net sales and net earnings for the first quarter of 2020, as well as record EPS of $0.65 per diluted share, a 12 percent increase over the same period of 2019.

“Our team jumped out of the gates quickly, extending our record-setting performance from 2019 while delivering an excellent first quarter,” stated CEO Matthew J. Missad. “The realignment we announced last year is going very well, and we are seeing additional opportunities for improvement as a result of these changes. When COVID-19 changed the business landscape late in the first quarter, our business unit and segment leaders adapted quickly, working hard to ensure the safety of our employees while providing essential products and services to our customers. I would like to congratulate our team for seamlessly handling our organizational changes while simultaneously battling the headwinds that came with COVID-19."

The vast majority of UFP Industries’ employees are deemed essential critical infrastructure workers and continue to serve customers. In other cases, the company serves customers who have temporarily shut down, and the company has reduced operations and temporarily furloughed employees as necessary.

UFP Industries has a strong balance sheet with long-term credit facilities and cash that currently provide over $390 million in available liquidity. As a result of its strong financial position and the confidence it has in its future performance after COVID-19 restrictions are eased, the company repurchased approximately 750,000 shares of its common stock during the first quarter at an average price of $38.62. These repurchases substantially reduced the dilutive effect of shares issued in 2019 and 2020 under the company’s various share-based compensation programs. 

On April 22, 2020, the company’s board approved a quarterly dividend payment of 12.5 cents a share, a prorated 25 percent increase over the dividends paid in 2019. The dividend is payable on June 15, 2020, to shareholders of record on June 1, 2020. Effective April 22, 2020, the company’s shareholders approved the change in the company’s name from Universal Forest Products, Inc. to UFP Industries, Inc.

UFP Industries will provide further detail on the impact of the COVID-19 virus on its operations during its first quarter earnings call, which has been rescheduled from April 23, 2020, to May 7, 2020.

"We realize most investors will have questions about the impact of COVID-19 on financial results for the second quarter and the balance of 2020,” stated Missad. “Since those results very much depend on the future status of various state directives, and given the assumption that federal stay-at-home guidance is due to expire April 30, we expect to have better insight on May 7 and more detail on our new business segments. On behalf of our employees and other stakeholders, I encourage our elected officials to safely and expeditiously allow a targeted, risk-based resumption of business as soon as reasonably practical.”

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

  • Earnings from operations of $58.6 million were up 21 percent, and net earnings attributable to controlling interest of $40.2 million were up 13 percent
  • EBITDA of $77.1 million increased by 17 percent
  • Net sales of $1.03 billion represent a 2 percent increase; lower lumber prices reduced gross sales by 3 percent

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

UFP Retail

  • $365.0 million in gross sales, up 6 percent over the first quarter of 2019. Retail unit sales increased 9 percent, while lower selling prices reduced the gross sales figure by 3 percent. The following business units drove unit sales growth: Home and Décor (up 26 percent), UFP-Edge (up 14 percent), ProWood (up 14 percent) and Fence, Lawn and Garden (up 8 percent).

UFP Industrial

  • $258.6 million in gross sales, down 7 percent from the first quarter of 2019. Unit sales were flat, with lower lumber prices accounting for the 7 percent reduction in gross sales.  

UFP Construction

  • $384.9 million in gross sales, up 4 percent over the first quarter of 2019, due to a 6 percent increase in unit sales and a 2 percent decrease in selling prices. Unit sales rose in all business units: Concrete Forming (up 15 percent), Factory Built (up 12 percent), Commercial (up 3 percent) and Site Built (up 1 percent).

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, May 7, 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 3838977. 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 through August 6, 2020, at 855-859-2056, 404-537-3406 or 800-585-5367.

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 robust 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.

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

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


CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2020/2019
 
    Quarter Period        Year to Date    
(In thousands, except per share data)   2020         2019         2020         2019      
                                         
                                         
                                         
NET SALES   $   1,032,062     100%   $   1,015,125     100%   $   1,032,062     100%   $   1,015,125     100.0%
                                         
COST OF GOODS SOLD    861,934     83.5   860,858     84.8   861,934     83.5   860,858     84.8
                                         
GROSS PROFIT   170,128     16.5   154,267     15.2   170,128     16.5   154,267     15.2
                                         
SELLING,  GENERAL  AND                                         
ADMINISTRATIVE  EXPENSES   112,231     10.9   105,317     10.4   112,231     10.9   105,317     10.4
FOREIGN CURRENCY EXCHANGE (GAIN) LOSS    (450 )   -   626     0.1   (450 )   -   626     0.1
NET GAIN ON DISPOSITION AND IMPAIRMENT OF ASSETS   (285 )   -   (122 )   -   (285 )   -   (122 )   -
                                         
EARNINGS FROM OPERATIONS   58,632     5.7   48,446     4.8   58,632     5.7   48,446     4.8
                                         
OTHER EXPENSE, NET   4,740     0.5   867     0.1   4,740     0.5   867     0.1
                                         
EARNINGS BEFORE INCOME TAXES   53,892     5.2   47,579     4.7   53,892     5.2   47,579     4.7
                                         
INCOME TAXES   13,322     1.3   11,577     1.1   13,322     1.3   11,577     1.1
                                         
NET EARNINGS   40,570     3.9   36,002     3.5   40,570     3.9   36,002     3.5
                                         
LESS NET EARNINGS ATTRIBUTABLE TO                                        
NONCONTROLLING INTEREST    (411 )   -   (462 )   -   (411 )   -   (462 )   -
                                         
NET EARNINGS ATTRIBUTABLE TO                                        
CONTROLLING INTEREST   $   40,159     3.9   $   35,540     3.5   $   40,159     3.9   $   35,540     3.5
                                         
                                         
EARNINGS PER SHARE - BASIC    $   0.65         $   0.58         $   0.65         $   0.58      
                                         
EARNINGS PER SHARE - DILUTED   $   0.65         $   0.58         $   0.65         $   0.58      
                                         
COMPREHENSIVE INCOME   32,014         37,375         32,014         37,375      
                                         
LESS COMPREHENSIVE INCOME ATTRIBUTABLE                                        
TO NONCONTROLLING INTEREST   1,924         (686 )       1,924         (686 )    
                                         
COMPREHENSIVE INCOME                                        
ATTRIBUTABLE TO CONTROLLING INTEREST   $   33,938         $   36,689         $   33,938         $   36,689      
                                         

 

SUPPLEMENTAL SALES AND SG&A DATA
    Quarter Period   Year to Date
Segment Classification   2020         2019     %   2020         2019     %
Retail   $   365,030         $   343,544     6.3%   $   365,030         $   343,544     6.3%
Industrial   258,603         277,016     -6.6%   258,603         277,016     -6.6%
Construction   384,860         369,052     4.3%   384,860         369,052     4.3%
International   36,343         36,626     -0.8%   36,343         36,626     -0.8%
Other   5,870         5,366     9.4%   5,870         5,366     9.4%
Total Gross Sales   1,050,706         1,031,604     1.9%   1,050,706         1,031,604     1.9%
Sales Allowances   (18,644 )       (16,479 )   -13.1%   (18,644 )       (16,479 )   13.1%
Total Net Sales   $   1,032,062         $   1,015,125     1.7%   $   1,032,062         $   1,015,125     1.7%
                                         
    2020     % of
Sales
  2019     % of
Sales
  2020     % of
Sales
  2019     % of
Sales
SG&A, Excluding Bonus Expense   $   98,239     9.5   $   92,935     9.2   $   98,239     9.5   $   92,935     9.2
Bonus Expense   13,992     1.4   12,382     1.2   13,992     1.4   12,382     1.2
Total SG&A   $   112,231     10.9   $   105,317     10.4   $   112,231     10.9   $   105,317     10.4
                                         
SG&A, Excluding Bonus Expense, as a Percentage of Gross Profit   57.7%         60.2%         57.7%         60.2%      


 

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
MARCH 2020/2019
                     
                     
                     
                     
                     
(In thousands)                    
ASSETS   2020   2019   LIABILITIES AND EQUITY   2020   2019
                     
                     
                     
CURRENT ASSETS           CURRENT LIABILITIES        
Cash and cash equivalents   $   32,129   $   17,111   Cash overdraft   $   -   $   18,732
Restricted cash   724   1,024   Accounts payable   162,039   170,667
Investments   17,778   16,197   Accrued liabilities   164,444   130,985
Accounts receivable   460,821   444,111   Current portion of debt   2,772   185
Inventories   510,681   580,163            
Other current assets   38,776   44,866            
                     
TOTAL CURRENT ASSETS   1,060,909   1,103,472   TOTAL CURRENT LIABILITIES   329,255   320,569
                     
OTHER ASSETS   124,519   90,463   LONG-TERM DEBT AND        
INTANGIBLE ASSETS, NET   299,979   271,297   CAPITAL LEASE OBLIGATIONS   160,550   266,428
PROPERTY, PLANT           OTHER LIABILITIES   120,895   96,035
AND EQUIPMENT,  NET   397,575   356,166   EQUITY   1,272,282   1,138,366
                     
                     
TOTAL ASSETS   $   1,882,982   $   1,821,398   TOTAL LIABILITIES AND EQUITY   $   1,882,982   $   1,821,398
                     



CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2020/2019
(In thousands)   2020     2019  
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net earnings   $   40,570     $   36,002  
Adjustments to reconcile net earnings to net cash from operating activities:            
             
Depreciation     15,717       14,475  
Amortization of intangibles     1,571       1,852  
Expense associated with share-based and grant compensation arrangements     1,444       1,287  
Deferred income taxes (credit)     286       (742 )
Unrealized loss (gain) on investments and other     3,173       (1,348 )
Net gain on disposition and impairment of assets     (285 )     (122 )
Changes in:            
Accounts receivable     (94,253 )     (100,716 )
Inventories     (25,783 )     (23,649 )
Accounts payable and cash overdraft     20,047       25,056  
Accrued liabilities and other     (8,648 )     (7,924 )
NET CASH FROM OPERATING ACTIVITIES     (46,161 )     (55,829 )
             
CASH FLOWS FROM INVESTING ACTIVITIES:            
Purchases of property, plant, and equipment     (27,286 )     (15,883 )
Proceeds from sale of property, plant and equipment     409       241  
Acquisitions and purchase of noncontrolling interest, net of cash received     (18,487 )     -  
Purchases of investments     (14,052 )     (449 )
Proceeds from sale of investments     11,260       340  
Other     (54 )     200  
NET CASH USED IN INVESTING ACTIVITIES     (48,210 )     (15,551 )
             
CASH FLOWS FROM FINANCING ACTIVITIES:            
Borrowings under revolving credit facilities     6,759       237,560  
Repayments under revolving credit facilities     (6,498 )     (173,232 )
Repayments of debt     (3,074 )     (3,029 )
Proceeds from issuance of common stock     319       261  
Distributions to noncontrolling interest     (299 )     (500 )
Dividends paid to shareholders     (7,730 )     -  
Repurchase of common stock     (29,212 )     -  
Other     12       9  
NET CASH FROM (USED IN) FINANCING ACTIVITIES     (39,723 )     61,069  
             
Effect of exchange rate changes on cash     (1,719 )     248  
NET CHANGE IN CASH AND CASH EQUIVALENTS     (135,813 )     (10,063 )
             
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     168,666       28,198  
             
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD   $   32,853     $   18,135  
             
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   $   32,129     $   17,111  
Restricted cash, end of period     724       1,024  
All cash and cash equivalents, end of period   $   32,853     $   18,135  
             


 

EBITDA RECONCILIATION (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 2020/2019
 
  Quarter Period   Year to Date
(In thousands) 2020   2019   2020   2019
Net earnings 40,570     36,002     40,570     36,002  
Interest  expense 1,908     2,460     1,908     2,460  
Interest and investment income (341 )   (245 )   (341 )   (245 )
Income taxes 13,322     11,577     13,322     11,577  
Expense associated with share-based compensation arrangements 1,444     1,287     1,444     1,287  
Net gain on disposition and impairment of assets (285 )   (122 )   (285 )   (122 )
Unrealized loss (gain) on investments 3,173     (1,348 )   3,173     (1,348 )
Depreciation expense 15,717     14,475     15,717     14,475  
Amortization of intangibles 1,571     1,852     1,571     1,852  
EBITDA   77,079       65,938       77,079       65,938  



 

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 - MARCH 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    83.5     84.0     84.8  
GROSS PROFIT   16.5     16.0     15.2  
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES   10.9     10.6     10.4  
FOREIGN CURRENCY EXCHANGE (GAIN) LOSS   -     (0.1)     0.1  
NET GAIN ON DISPOSITION AND IMPAIRMENT OF ASSETS   -     -     -  
EARNINGS FROM OPERATIONS   5.7     5.5     4.8  
OTHER EXPENSE, NET   0.5     0.4     0.1  
EARNINGS BEFORE INCOME TAXES   5.2     5.1     4.7  
INCOME TAXES   1.3     1.3     1.1  
NET EARNINGS   3.9     3.8     3.5  
LESS NET EARNINGS ATTRIBUTABLE TO                  
NONCONTROLLING INTEREST    -     -     -  
NET EARNINGS ATTRIBUTABLE TO                  
CONTROLLING INTEREST   3.9 %   3.8 %   3.5 %
                   
Note: Actual percentages are calculated and may not sum to total due to rounding.                  
                   
                   
2019 NET SALES   $ 1,015,125              
2020 SELL PRICE DECLINE   3.00 %            
DECREASE IN 2020 NET SALES DUE TO SELL PRICE DECLINE   $ 30,454              
ACTUAL 2020 NET SALES   1,032,062              
ADJUSTED 2020 NET SALES   $ 1,062,516              
                   
ACTUAL 2020 COST OF GOODS SOLD   $ 861,934              
PLUS DIFFERENCE IN NET SALES (ABOVE)   30,454              
ADJUSTED 2020 COST OF GOODS SOLD   $ 892,388              
                   

 

UFPI.jpg

Source: UFP Industries, Inc.