News Releases

UFP Industries Reports All-time Quarterly Records

April 21, 2021 at 4:05 PM EDT
– Unit sales increase 33 percent, net earnings increase 157 percent –

GRAND RAPIDS, Mich., April 21, 2021 (GLOBE NEWSWIRE) -- UFP Industries, Inc. (Nasdaq: UFPI) today announced record net sales of $1.83 billion for the first quarter of 2021, a 77 percent increase over the first quarter of 2020, and record net earnings attributable to controlling interest of $103 million, a 157 percent increase over the same period of 2020. The company also reported record EPS of $1.67 per diluted share compared to $0.65 in the first quarter last year. While first quarter performance is typically limited by seasonality, net sales and earnings for the first quarter of 2021 were the highest of any quarter in company history.

“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 Matthew J. Missad. “As a result, we are experiencing strong organic growth in our retail and industrial segments as well as in our site-built and factory-built housing business units. Our improvement in gross profit resulted from these changes, as well as a better pricing model that quickly adjusts to lumber market fluctuations and our growing line-up of new and value-added products. I want to thank our employees for their outstanding efforts and especially recognize our general managers for the improvements they’ve made at our facilities. I remain very encouraged about the growth prospects for our business as we look forward.”

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 $159.4 million increased 58 percent over the first quarter of 2020, led by Deckorators Vault decking and deck accessories, UFP-Edge shiplap and trim, Handprint project panels and ProWood Fire Retardant treated lumber.

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

UFP Industries maintains a strong balance sheet with liquidity of approximately $421 million at the end of the first quarter. The company’s operating cash flow decreased by approximately $150 million as a result of a greater seasonal investment in net working capital of $216 million associated with higher accounts receivable and to build inventory to satisfy strong customer demand, particularly in the retail business. Net debt increased to $429 million from $131 million at the end of the first quarter of 2020 due to these factors and the acquisition of PalletOne and its wholly owned subsidiary, Sunbelt Forest Products.

On April 12, 2021, Sunbelt (an affiliate of UFP Retails Solutions) completed its acquisition of Spartanburg Forest Products and its affiliates, expanding its pressure-treating capacity throughout the eastern U.S. In addition, on April 19, 2021, UFP closed on the purchase of Walnut Hollow Farm, which produces a variety of finely finished wood surfaces used in hobby, craft and woodworking projects, as well as in taxidermy. Both transactions broaden UFP Retail Solutions’ customer base and product offerings.

“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, primarily Sunbelt Forest Products. Organic unit growth was driven by Deckorators (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.

UFP Industrial

  • $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 of PalletOne and T&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 and T&R Lumber contributed over $13 million, or 30 percent, to the increase in gross profit.

UFP Construction

  • $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

UFP Industries will conduct a conference call to discuss information included in this news release and related matters at 4:30 p.m. ET on Wednesday, April 21, 2021. 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 6679712. 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 April 23, 2021, at 855-859-2056, 404-537-3406 or 800-585-5367.

UFP Industries, Inc.

UFP Industries is a holding company whose operating subsidiaries – UFP Industrial, UFP Construction and UFP Retail Solutions – manufacture, distribute and sell a wide variety of value-added products used in residential and commercial construction, packaging and other industrial applications worldwide. Founded in 1955, the company is headquartered in Grand Rapids, Mich., with affiliates in 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 Adjusted EBITDA, a non-GAAP measure, an alternative performance measure which may provide useful information to investors.

Net earnings
Net earnings refers to net earnings attributable to controlling interest unless specifically noted.

---------------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 2021/2020
                                   
                                 
  Quarter Period Year to Date
(In thousands, except per share data) 2021 2020 2021 2020
NET SALES $ 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 Net Sales   $ 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 )  
NET CASH USED IN INVESTING ACTIVITIES   (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    
NET CASH FROM (USED IN) FINANCING ACTIVITIES   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  
                       

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Source: UFP Industries, Inc.