UFP Industries Reports All-time Quarterly Records
“UFP Industries is enjoying unprecedented growth as we benefit from strong market conditions and the successful execution of our strategic plans. We are using our new market-focused structure to target and quickly assimilate acquisitions, better leverage our fixed costs, and reallocate resources to increase capacity efficiently,” said CEO
The elevated level of softwood lumber prices contributed to a significant increase in the company’s cost of materials and was responsible for 44 percent of the 77 percent increase in net sales. The remaining 33 percent came from increased unit sales – 23 percent from acquisitions and 10 percent from organic growth.
New product sales of
First Quarter 2021 Highlights (comparisons on a year-over-year basis):
- Net sales of
$1.83 billion increased 77 percent due to a 33 percent increase in unit sales and 44 percent increase in selling prices - An increase in SG&A of nearly
$41 million , or 37 percent, is largely attributable to recent acquisitions ($11.5 million , including amortization expense of$1.7 million ), accrued bonus expenses ($22.5 million ) resulting from increased profitability, and increased compensation costs of$10 million , offset by net decreases of$3 million in travel costs and bad debt expense - Earnings from operations of
$137.5 million increased 134 percent - Adjusted EBITDA of
$162.7 million increased 111 percent
On
“The recent acquisitions of Sunbelt and Spartanburg not only allow us to leverage costs and improve efficiencies in wood treating, they allow us to bring our value-added products to a broader and more diverse customer base. UFP will continue to pursue acquisitions that expand our capacity, enhance our capabilities, improve efficiencies and increase our sales of value-added products,” said Missad. “Growth is baked into our DNA, and I’d encourage those looking for attractive career opportunities to consider UFP during this dynamic time. We are hiring at nearly every location in many roles and currently have about 500 jobs available for hard working, highly motivated future team members.”
By business segment, the company reported the following first quarter 2021 results:
UFP Retail Solutions
$759 million in net sales, up 116 percent over the first quarter of 2020 due to a 56 percent increase in selling prices, a 19 percent increase in organic unit sales, and a 41 percent unit increase resulting from acquisitions, primarilySunbelt Forest Products . Organic unit growth was driven byDeckorators (up 64 percent), Handprint (up 30 percent), Outdoor Essentials (up 28 percent), and UFP Edge (up 24 percent). Gross profit for the segment grew 122 percent. Acquisitions contributed over$10 million , or almost 23 percent, to the increase in gross profit.
$448.9 million in net sales, up 75 percent from the first quarter of 2020. Unit sales increased 37 percent and selling prices increased 38 percent. Organic growth accounted for 5 percent of the unit sales growth; the acquisitions ofPalletOne andT&R Lumber accounted for 32 percent. Gross profit for the segment rose 83 percent, far exceeding unit sales growth, due to the company’s focus on adding value-added products and its ability to effectively increase capacity.PalletOne andT&R Lumber contributed over$13 million , or 30 percent, to the increase in gross profit.
$559.5 million in net sales, up 47 percent over the first quarter of 2020, due to an 8 percent increase in unit sales and a 39 percent increase in selling prices. Unit sales to site-built and factory-built housing customers rose 21 percent and 15 percent, respectively. Unit sales to commercial customers fell 9 percent. Gross profit for the construction segment grew 40 percent over the first quarter of 2020, led by the site-built and factory-built business units.
CONFERENCE CALL
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
Non-GAAP Financial Information
This release includes certain financial information not prepared in accordance with
Net earnings
Net earnings refers to net earnings attributable to controlling interest unless specifically noted.
---------------AT THE COMPANY---------------
VP, Business Outreach
(616) 365-1555
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED) | ||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED | ||||||||||||||||||||||||
MARCH 2021/2020 | ||||||||||||||||||||||||
Quarter Period | Year to Date | |||||||||||||||||||||||
(In thousands, except per share data) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
$ | 1,825,004 | 100.0 | % | $ | 1,032,062 | 100.0 | % | $ | 1,825,004 | 100.0 | % | $ | 1,032,062 | 100.0 | % | |||||||||
COST OF GOODS SOLD | 1,538,450 | 84.3 | 864,826 | 83.8 | 1,538,450 | 84.3 | 864,826 | 83.8 | ||||||||||||||||
GROSS PROFIT | 286,554 | 15.7 | 167,236 | 16.2 | 286,554 | 15.7 | 167,236 | 16.2 | ||||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 150,098 | 8.2 | 109,339 | 10.6 | 150,098 | 8.2 | 109,339 | 10.6 | ||||||||||||||||
ASSET IMPAIRMENT CHARGES AND OTHER COSTS, NET | (1,031 | ) | (0.1 | ) | (735 | ) | (0.1 | ) | (1,031 | ) | (0.1 | ) | (735 | ) | (0.1 | ) | ||||||||
EARNINGS FROM OPERATIONS | 137,487 | 7.5 | 58,632 | 5.7 | 137,487 | 7.5 | 58,632 | 5.7 | ||||||||||||||||
OTHER EXPENSE, NET | 1,485 | 0.1 | 4,740 | 0.5 | 1,485 | 0.1 | 4,740 | 0.5 | ||||||||||||||||
EARNINGS BEFORE INCOME TAXES | 136,002 | 7.5 | 53,892 | 5.2 | 136,002 | 7.5 | 53,892 | 5.2 | ||||||||||||||||
INCOME TAXES | 31,751 | 1.7 | 13,322 | 1.3 | 31,751 | 1.7 | 13,322 | 1.3 | ||||||||||||||||
NET EARNINGS | 104,251 | 5.7 | 40,570 | 3.9 | 104,251 | 5.7 | 40,570 | 3.9 | ||||||||||||||||
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST | (940 | ) | (0.1 | ) | (411 | ) | — | (940 | ) | (0.1 | ) | (411 | ) | — | ||||||||||
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST | $ | 103,311 | 5.7 | $ | 40,159 | 3.9 | $ | 103,311 | 5.7 | $ | 40,159 | 3.9 | ||||||||||||
EARNINGS PER SHARE - BASIC | $ | 1.67 | $ | 0.65 | $ | 1.67 | $ | 0.65 | ||||||||||||||||
EARNINGS PER SHARE - DILUTED | $ | 1.67 | $ | 0.65 | $ | 1.67 | $ | 0.65 | ||||||||||||||||
COMPREHENSIVE INCOME | 102,055 | 32,014 | 102,055 | 32,014 | ||||||||||||||||||||
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | (414 | ) | 1,924 | (414 | ) | 1,924 | ||||||||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST | $ | 101,641 | $ | 33,938 | $ | 101,641 | $ | 33,938 | ||||||||||||||||
SUPPLEMENTAL DATA | ||||||||||||||||||||||
Quarter Period | Year to Date | |||||||||||||||||||||
Segment Classification | 2021 | 2020 | % | 2021 | 2020 | % | ||||||||||||||||
Retail | $ | 759,021 | $ | 352,161 | 115.5 | % | $ | 759,021 | $ | 352,161 | 115.5 | % | ||||||||||
Industrial | 448,873 | 256,543 | 75.0 | % | 448,873 | 256,543 | 75.0 | % | ||||||||||||||
Construction | 559,531 | 381,155 | 46.8 | % | 559,531 | 381,155 | 46.8 | % | ||||||||||||||
All Other | 57,579 | 42,203 | 36.4 | % | 57,579 | 42,203 | 36.4 | % | ||||||||||||||
Total |
$ | 1,825,004 | $ | 1,032,062 | 76.8 | % | $ | 1,825,004 | $ | 1,032,062 | 76.8 | % | ||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
SG&A as a Percentage of Gross Profit | 52.4 | % | 65.4 | % | 52.4 | % | 65.4 | % |
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) | |||||||||||||||
MARCH 2021/2020 | |||||||||||||||
(In thousands) | |||||||||||||||
ASSETS | 2021 | 2020 | LIABILITIES AND EQUITY | 2021 | 2020 | ||||||||||
CURRENT ASSETS | CURRENT LIABILITIES | ||||||||||||||
Cash and cash equivalents | $ | 44,399 | $ | 32,129 | Cash overdraft | $ | 47,140 | $ | — | ||||||
Restricted cash | 629 | 724 | Accounts payable | 299,398 | 162,039 | ||||||||||
Investments | 31,439 | 17,778 | Accrued liabilities | 265,412 | 164,444 | ||||||||||
Accounts receivable | 808,105 | 460,821 | Current portion of debt | 109 | 2,772 | ||||||||||
Inventories | 823,414 | 510,681 | |||||||||||||
Other current assets | 29,072 | 38,776 | |||||||||||||
TOTAL CURRENT ASSETS | 1,737,058 | 1,060,909 | TOTAL CURRENT LIABILITIES | 612,059 | 329,255 | ||||||||||
OTHER ASSETS | 149,393 | 124,519 | |||||||||||||
INTANGIBLE ASSETS, NET | 415,402 | 299,979 | LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS | 426,310 | 160,550 | ||||||||||
OTHER LIABILITIES | 165,308 | 120,895 | |||||||||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 488,367 | 397,575 | EQUITY | 1,586,543 | 1,272,282 | ||||||||||
TOTAL ASSETS | $ | 2,790,220 | $ | 1,882,982 | TOTAL LIABILITIES AND EQUITY | $ | 2,790,220 | $ | 1,882,982 |
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
FOR THE THREE MONTHS ENDED | ||||||||
MARCH 2021/2020 | ||||||||
(In thousands) | 2021 | 2020 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net earnings | $ | 104,251 | $ | 40,570 | ||||
Adjustments to reconcile net earnings to net cash from operating activities: | ||||||||
Depreciation | 18,733 | 15,717 | ||||||
Amortization of intangibles | 3,998 | 1,571 | ||||||
Expense associated with share-based and grant compensation arrangements | 2,981 | 1,444 | ||||||
Deferred income taxes | 142 | 286 | ||||||
Unrealized loss (gain) on investment and other | (1,754 | ) | 3,173 | |||||
Equity in earnings of investee | 630 | |||||||
Net loss (gain) on disposition and impairment of assets | (532 | ) | (285 | ) | ||||
Changes in: | ||||||||
Accounts receivable | (253,323 | ) | (94,253 | ) | ||||
Inventories | (207,768 | ) | (25,783 | ) | ||||
Accounts payable and cash overdraft | 121,892 | 20,047 | ||||||
Accrued liabilities and other | 14,090 | (8,648 | ) | |||||
NET CASH FROM OPERATING ACTIVITIES | (196,660 | ) | (46,161 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property, plant, and equipment | (34,656 | ) | (27,286 | ) | ||||
Proceeds from sale of property, plant and equipment | 5,062 | 409 | ||||||
Acquisitions and purchase of noncontrolling interest, net of cash received | (261,133 | ) | (18,487 | ) | ||||
Purchases of investments | (8,738 | ) | (14,052 | ) | ||||
Proceeds from sale of investments | 3,381 | 11,260 | ||||||
Other | (414 | ) | (54 | ) | ||||
(296,498 | ) | (48,210 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Borrowings under revolving credit facilities | 236,280 | 6,759 | ||||||
Repayments under revolving credit facilities | (121,570 | ) | (6,498 | ) | ||||
Contingent consideration payment and other | (627 | ) | (3,074 | ) | ||||
Proceeds from issuance of common stock | 363 | 319 | ||||||
Dividends paid to shareholders | (9,274 | ) | (7,730 | ) | ||||
Distributions to noncontrolling interest | (2,914 | ) | (299 | ) | ||||
Repurchase of common stock | 0 | (29,212 | ) | |||||
Other | (331 | ) | 12 | |||||
101,927 | (39,723 | ) | ||||||
Effect of exchange rate changes on cash | (349 | ) | (1,719 | ) | ||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (391,580 | ) | (135,813 | ) | ||||
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 436,608 | 168,666 | ||||||
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 45,028 | $ | 32,853 | ||||
Reconciliation of cash and cash equivalents and restricted cash: | ||||||||
Cash and cash equivalents, beginning of period | $ | 436,507 | $ | 168,336 | ||||
Restricted cash, beginning of period | 101 | 330 | ||||||
All cash and cash equivalents, beginning of period | $ | 436,608 | $ | 168,666 | ||||
Cash and cash equivalents, end of period | $ | 44,399 | $ | 32,129 | ||||
Restricted cash, end of period | 629 | 724 | ||||||
All cash and cash equivalents, end of period | $ | 45,028 | $ | 32,853 | ||||
ADJUSTED EBITDA RECONCILIATION (UNAUDITED) | |||||||||||||||
FOR THE THREE MONTHS ENDED | |||||||||||||||
MARCH 2021/2020 | |||||||||||||||
Quarter Period | Year to Date | ||||||||||||||
(In thousands) | 2021 | 2020 | 2021 |
2020 | |||||||||||
Net earnings | $ | 104,251 | $ | 40,570 | $ | 104,251 | $ | 40,570 | |||||||
Interest expense | 3,151 | 1,908 | 3,151 | 1,908 | |||||||||||
Interest and investment income | (542 | ) | (341 | ) | (542 | ) | (341 | ) | |||||||
Income taxes | 31,751 | 13,322 | 31,751 | 13,322 | |||||||||||
Expenses associated with share-based compensation arrangements | 2,981 | 1,444 | 2,981 | 1,444 | |||||||||||
Net loss (gain) on disposition and impairment of assets | (532 | ) | (285 | ) | (532 | ) | (285 | ) | |||||||
Equity in earnings of investee | 630 | 0 | 630 | 0 | |||||||||||
Unrealized (gain) loss on investments | (1,754 | ) | 3,173 | (1,754 | ) | 3,173 | |||||||||
Depreciation expense | 18,733 | 15,717 | 18,733 | 15,717 | |||||||||||
Amortization of intangibles | 3,998 | 1,571 | 3,998 | 1,571 | |||||||||||
Adjusted EBITDA | $ | 162,667 | $ | 77,079 | $ | 162,667 | $ | 77,079 | |||||||
Source: UFP Industries, Inc.