UFP Industries Reports Record Earnings for Fourth Quarter and Year
-- Unit sales increase 25 percent and diluted EPS increases 117 percent in Q4; board increases share buyback authorization
“Our new market-focused organizational structure is helping us to better identify growth opportunities, and we are more strategically investing our capital. These investments, coupled with the addition of new value-added products and very strong demand, have resulted in unprecedented growth,” said CEO
Fourth Quarter 2021 Highlights (comparisons on a year-over-year basis):
- Net sales of
$2.02 billion increased 45 percent due to a 5 percent increase in organic unit sales, a 20 percent increase in unit sales from acquisitions, and a 20 percent increase in lumber prices. - Earnings from operations of
$195 million increased 121 percent. Acquisitions contributed$19 million to earnings. - An increase in SG&A of
$91 million , or 105 percent, is largely attributable to bonus and sales incentive compensation expenses resulting from increased profitability (up$67 million ), recent acquisitions ($10 million ), increases in wages and benefits ($4 million ), and travel and lodging (up$3 million ) as employees resumed more normal business travel activity. SG&A as a percentage of gross profit rose from 46 percent to 48 percent. - New product sales of
$189.1 million increased 42 percent. - Adjusted EBITDA of
$223.3 million increased 89 percent, and adjusted EBITDA margin expanded by 260 basis points to 11.1 percent. Acquisitions contributed$25 million to adjusted EBITDA.
Fiscal 2021 Highlights (comparisons on a year-over-year basis):
- Net sales of
$8.64 billion increased 68 percent due to a 4 percent increase in organic unit sales, a 24 percent increase in unit sales from acquisitions, and a 40 percent increase in lumber prices. - Earnings from operations of
$737.6 million increased 113 percent. Acquisitions contributed$50 million to earnings. - An increase in SG&A of
$238 million or 54 percent is largely attributable to increases in bonus and sales incentive compensation expenses due to increased profitability (up$147 million ), recent acquisitions ($50 million ), and increases in wages and benefits ($19 million ) and travel and lodging ($5 million ). SG&A as a percentage of gross profit fell from 56 percent to 49 percent. - New product sales were
$842 million , up 56 percent. - Adjusted EBITDA of
$834.9 million increased 93 percent, and adjusted EBITDA margin expanded by 130 basis points to 9.7 percent. Acquisitions contributed$71 million to adjusted EBITDA.
The company has also increased capital available for share repurchases. The company’s board authorized an increase in its share repurchase program to a total of up to 2.6 million shares. The company may utilize this authorization to repurchase shares to offset dilution resulting from long-term, share-based incentive compensation programs.
“The volatility in both the lumber market and the economy during the past few years has only validated the strength of our balanced business model and new market-focused structure,” said Missad. “More businesses are turning to UFP because of our growing portfolio and geographic reach, as well as our reliability as a supplier.”
By business segment, the Company reported the following 2021 results:
UFP Retail Solutions
Fourth Quarter:
Full Year:
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Fourth Quarter:
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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.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THE THREE AND TWELVE MONTHS ENDED
DECEMBER 2021/2020
Quarter Period | Year to Date | |||||||||||||||||||||||||||
(In thousands, except per share data) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||
$ | 2,016,805 | 100.0 | % | $ | 1,393,708 | 100.0 | % | $ | 8,636,134 | 100.0 | % | $ | 5,153,998 | 100.0 | % | |||||||||||||
COST OF GOODS SOLD | 1,645,241 | 81.6 | 1,206,653 | 86.6 | 7,229,167 | 83.7 | 4,353,702 | 84.5 | ||||||||||||||||||||
GROSS PROFIT | 371,564 | 18.4 | 187,055 | 13.4 | 1,406,967 | 16.3 | 800,296 | 15.5 | ||||||||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 178,149 | 8.8 | 86,826 | 6.2 | 682,253 | 7.9 | 444,596 | 8.6 | ||||||||||||||||||||
OTHER (GAINS) LOSSES, NET | (1,592 | ) | (0.1 | ) | 11,995 | 0.9 | (12,840 | ) | (0.1 | ) | 9,874 | 0.2 | ||||||||||||||||
EARNINGS FROM OPERATIONS | 195,007 | 9.7 | 88,234 | 6.3 | 737,554 | 8.5 | 345,826 | 6.7 | ||||||||||||||||||||
OTHER INTEREST AND EXPENSE, NET | 1,938 | 0.1 | 174 | — | 11,218 | 0.1 | 4,843 | 0.1 | ||||||||||||||||||||
EARNINGS BEFORE INCOME TAXES | 193,069 | 9.6 | 88,060 | 6.3 | 726,336 | 8.4 | 340,983 | 6.6 | ||||||||||||||||||||
INCOME TAXES | 46,063 | 2.3 | 23,303 | 1.7 | 173,972 | 2.0 | 87,101 | 1.7 | ||||||||||||||||||||
NET EARNINGS | 147,006 | 7.3 | 64,757 | 4.6 | 552,364 | 6.4 | 253,882 | 4.9 | ||||||||||||||||||||
LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST | (9,100 | ) | (0.5 | ) | (1,805 | ) | (0.1 | ) | (16,724 | ) | (0.2 | ) | (7,104 | ) | (0.1 | ) | ||||||||||||
NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST | $ | 137,906 | 6.8 | $ | 62,952 | 4.5 | $ | 535,640 | 6.2 | $ | 246,778 | 4.8 | ||||||||||||||||
EARNINGS PER SHARE - BASIC | $ | 2.21 | $ | 1.02 | $ | 8.61 | $ | 4.00 | ||||||||||||||||||||
EARNINGS PER SHARE - DILUTED | $ | 2.21 | $ | 1.02 | $ | 8.59 | $ | 4.00 | ||||||||||||||||||||
COMPREHENSIVE INCOME | 143,210 | 74,754 | 547,068 | 259,849 | ||||||||||||||||||||||||
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | (7,431 | ) | (6,622 | ) | (15,039 | ) | (9,976 | ) | ||||||||||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST | $ | 135,779 | $ | 68,132 | $ | 532,029 | $ | 249,873 | ||||||||||||||||||||
SUPPLEMENTAL DATA | ||||||||||||||||||||||||||||
(In thousands) | Quarter Period | Year to Date | ||||||||||||||||||||||||||
Segment Classification | 2021 | 2020 | % change | 2021 | 2020 | % change | ||||||||||||||||||||||
Retail | $ | 703,897 | $ | 505,249 | 39.3 | % | $ | 3,418,337 | $ | 2,167,122 | 57.7 | % | ||||||||||||||||
Industrial | 514,854 | 309,071 | 66.6 | % | 2,148,142 | 1,072,117 | 100.4 | % | ||||||||||||||||||||
Construction | 677,326 | 508,254 | 33.3 | % | 2,698,434 | 1,695,684 | 59.1 | % | ||||||||||||||||||||
All Other | 120,728 | 71,134 | 69.7 | % | 371,221 | 219,075 | 69.4 | % | ||||||||||||||||||||
Total |
$ | 2,016,805 | $ | 1,393,708 | 44.7 | % | $ | 8,636,134 | $ | 5,153,998 | 67.6 | % | ||||||||||||||||
2021 | % of Sales | 2020 | % of Sales | 2021 | % of Sales | 2020 | % of Sales | |||||||||||||||||||||
SG&A | $ | 178,149 | 8.8 | % | $ | 86,826 | 6.2 | % | $ | 682,253 | 7.9 | % | $ | 444,596 | 8.6 | % | ||||||||||||
SG&A as a Percentage of Gross Profit | 47.9 | % | 46.4 | % | 48.5 | % | 55.6 | % |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS BY SEGMENT (UNAUDITED)
FOR THE THREE AND TWELVE MONTHS ENDED
DECEMBER 2021/2020
Quarter Period | |||||||||||||||||||||||
2021 | |||||||||||||||||||||||
(In thousands) | Retail | Industrial | Construction | All Other | Corporate | Total | |||||||||||||||||
$ | 703,897 | $ | 514,854 | $ | 677,326 | $ | 118,738 | $ | 1,990 | $ | 2,016,805 | ||||||||||||
COST OF GOODS SOLD | 639,827 | 391,365 | 523,334 | 76,846 | 13,869 | 1,645,241 | |||||||||||||||||
GROSS PROFIT | 64,070 | 123,489 | 153,992 | 41,892 | (11,879 | ) | 371,564 | ||||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 24,658 | 49,455 | 74,148 | 12,182 | 17,706 | 178,149 | |||||||||||||||||
OTHER | 88 | (560 | ) | (56 | ) | (533 | ) | (531 | ) | (1,592 | ) | ||||||||||||
EARNINGS FROM OPERATIONS | $ | 39,324 | $ | 74,594 | $ | 79,900 | $ | 30,243 | $ | (29,054 | ) | $ | 195,007 | ||||||||||
Quarter Period | |||||||||||||||||||||||
2020 | |||||||||||||||||||||||
(In thousands) | Retail | Industrial | Construction | All Other | Corporate | Total | |||||||||||||||||
$ | 505,249 | $ | 309,071 | $ | 508,254 | $ | 68,591 | $ | 2,543 | $ | 1,393,708 | ||||||||||||
COST OF GOODS SOLD | 444,886 | 260,042 | 430,537 | 45,876 | 25,312 | 1,206,653 | |||||||||||||||||
GROSS PROFIT | 60,363 | 49,029 | 77,717 | 22,715 | (22,769 | ) | 187,055 | ||||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 27,045 | 23,484 | 45,418 | 6,243 | (15,364 | ) | 86,826 | ||||||||||||||||
OTHER | 90 | (3,996 | ) | 13,835 | 2,313 | (247 | ) | 11,995 | |||||||||||||||
EARNINGS FROM OPERATIONS | $ | 33,228 | $ | 29,541 | $ | 18,464 | $ | 14,159 | $ | (7,158 | ) | $ | 88,234 | ||||||||||
Year to Date | |||||||||||||||||||||||
2021 | |||||||||||||||||||||||
(In thousands) | Retail | Industrial | Construction | All Other | Corporate | Total | |||||||||||||||||
$ | 3,418,337 | $ | 2,148,142 | $ | 2,698,434 | $ | 362,473 | $ | 8,748 | $ | 8,636,134 | ||||||||||||
COST OF GOODS SOLD | 3,120,634 | 1,683,466 | 2,167,405 | 237,696 | 19,966 | 7,229,167 | |||||||||||||||||
GROSS PROFIT | 297,703 | 464,676 | 531,029 | 124,777 | (11,218 | ) | 1,406,967 | ||||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 169,033 | 200,194 | 267,292 | 52,204 | (6,470 | ) | 682,253 | ||||||||||||||||
OTHER | (94 | ) | (456 | ) | (493 | ) | (2,237 | ) | (9,560 | ) | (12,840 | ) | |||||||||||
EARNINGS FROM OPERATIONS | $ | 128,764 | $ | 264,938 | $ | 264,230 | $ | 74,810 | $ | 4,812 | $ | 737,554 | |||||||||||
Year to Date | |||||||||||||||||||||||
2020 | |||||||||||||||||||||||
(In thousands) | Retail | Industrial | Construction | All Other | Corporate | Total | |||||||||||||||||
$ | 2,167,122 | $ | 1,072,117 | $ | 1,695,684 | $ | 217,094 | $ | 1,981 | $ | 5,153,998 | ||||||||||||
COST OF GOODS SOLD | 1,874,114 | 895,466 | 1,433,469 | 147,117 | 3,536 | 4,353,702 | |||||||||||||||||
GROSS PROFIT | 293,008 | 176,651 | 262,215 | 69,977 | (1,555 | ) | 800,296 | ||||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 137,641 | 97,146 | 179,516 | 34,471 | (4,178 | ) | 444,596 | ||||||||||||||||
OTHER | 56 | (3,873 | ) | 13,690 | 775 | (774 | ) | 9,874 | |||||||||||||||
EARNINGS FROM OPERATIONS | $ | 155,311 | $ | 83,378 | $ | 69,009 | $ | 34,731 | $ | 3,397 | $ | 345,826 | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
DECEMBER 2021/2020
(In thousands) | ||||||||||||||
ASSETS | 2021 | 2020 | LIABILITIES AND EQUITY | 2021 | 2020 | |||||||||
CURRENT ASSETS | CURRENT LIABILITIES | |||||||||||||
Cash and cash equivalents | $ | 286,662 | $ | 436,507 | Cash Overdraft | $ | 17,030 | $ | — | |||||
Restricted cash | 4,561 | 101 | Accounts payable | 319,125 | 211,518 | |||||||||
Investments | 36,495 | 24,308 | Accrued liabilities | 397,204 | 252,131 | |||||||||
Accounts receivable | 737,805 | 470,504 | Current portion of debt | 42,683 | 100 | |||||||||
Inventories | 963,320 | 567,294 | ||||||||||||
Other current assets | 44,633 | 39,648 | ||||||||||||
TOTAL CURRENT ASSETS | 2,073,476 | 1,538,362 | TOTAL CURRENT LIABILITIES | 776,042 | 463,749 | |||||||||
OTHER ASSETS | 151,351 | 117,521 | ||||||||||||
INTANGIBLE ASSETS, NET | 431,424 | 331,846 | LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS | 277,567 | 311,607 | |||||||||
OTHER LIABILITIES | 175,093 | 146,383 | ||||||||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 589,020 | 417,162 | EQUITY | 2,016,569 | 1,483,152 | |||||||||
TOTAL ASSETS | $ | 3,245,271 | $ | 2,404,891 | TOTAL LIABILITIES AND EQUITY | $ | 3,245,271 | $ | 2,404,891 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE TWELVE MONTHS ENDED
DECEMBER 2021/2020
(In thousands) | 2021 | 2020 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net earnings | $ | 552,364 | $ | 253,882 | ||
Adjustments to reconcile net earnings to net cash from operating activities: | ||||||
Depreciation | 84,184 | 63,964 | ||||
Amortization of intangibles | 13,948 | 8,716 | ||||
Expense associated with share-based and grant compensation arrangements | 11,224 | 4,034 | ||||
Deferred income taxes | 5,653 | 1,857 | ||||
Unrealized gain on investment and other | (4,118 | ) | (2,076 | ) | ||
Equity in earnings of investee | 3,902 | — | ||||
Net (gain) loss on sale and disposition of assets | (11,992 | ) | 1,470 | |||
— | 11,485 | |||||
Gain from reduction of estimated earnout liability | — | (4,134 | ) | |||
Changes in: | ||||||
Accounts receivable | (85,439 | ) | (87,552 | ) | ||
Inventories | (260,301 | ) | (76,022 | ) | ||
Accounts payable and cash overdraft | 78,060 | 62,405 | ||||
Accrued liabilities and other | 124,992 | 98,448 | ||||
NET CASH FROM OPERATING ACTIVITIES | 512,477 | 336,477 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property, plant, and equipment | (151,166 | ) | (89,182 | ) | ||
Proceeds from sale of property, plant and equipment | 29,973 | 2,922 | ||||
Acquisitions and purchase of noncontrolling interest, net of cash received | (475,960 | ) | (65,255 | ) | ||
Purchases of investments | (23,797 | ) | (28,054 | ) | ||
Proceeds from sale of investments | 14,882 | 24,805 | ||||
Other | (5,119 | ) | 46 | |||
(611,187 | ) | (154,718 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Borrowings under revolving credit facilities | 892,072 | 6,862 | ||||
Repayments under revolving credit facilities | (888,695 | ) | (6,498 | ) | ||
Contingent consideration payment and other | (3,176 | ) | (5,787 | ) | ||
Issuance of long-term debt | — | 150,000 | ||||
Proceeds from issuance of common stock | 2,116 | 1,395 | ||||
Dividends paid to shareholders | (40,209 | ) | (30,669 | ) | ||
Distributions to noncontrolling interest | (6,750 | ) | (932 | ) | ||
Repurchase of common stock | — | (29,212 | ) | |||
Other | (364 | ) | 62 | |||
(45,006 | ) | 85,221 | ||||
Effect of exchange rate changes on cash | (1,669 | ) | 962 | |||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (145,385 | ) | 267,942 | |||
ALL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 436,608 | 168,666 | ||||
ALL CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 291,223 | $ | 436,608 | ||
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 | $ | 286,662 | $ | 436,507 | ||
Restricted cash, end of period | 4,561 | 101 | ||||
All cash and cash equivalents, end of period | $ | 291,223 | $ | 436,608 | ||
ADJUSTED EBITDA RECONCILIATION (UNAUDITED)
FOR THE THREE AND TWELVE MONTHS ENDED
DECEMBER 2021/2020
Quarter Period | Year to Date |
|||||||||||||
(In thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||
Net earnings | $ | 147,006 | $ | 64,757 | $ | 552,364 | $ | 253,882 | ||||||
Interest expense | 3,331 | 3,020 | 13,814 | 9,311 | ||||||||||
Interest and investment income | (521 | ) | (851 | ) | (2,380 | ) | (2,392 | ) | ||||||
Income taxes | 46,063 | 23,303 | 173,972 | 87,101 | ||||||||||
Expenses associated with share-based compensation arrangements | 2,780 | 882 | 11,224 | 4,034 | ||||||||||
Net gain on disposition and impairment of assets | (1,510 | ) | 2,132 | (11,992 | ) | 1,470 | ||||||||
— | 11,485 | — | 11,485 | |||||||||||
Equity in earnings of investee | 1,491 | — | 3,902 | — | ||||||||||
Gain from reduction of estimated earnout liability | — | (4,134 | ) | — | (4,134 | ) | ||||||||
Unrealized loss (gain) on investments | (2,362 | ) | (1,994 | ) | (4,118 | ) | (2,076 | ) | ||||||
Depreciation expense | 22,443 | 16,738 | 84,184 | 63,964 | ||||||||||
Amortization of intangibles | 4,579 | 2,853 | 13,948 | 8,716 | ||||||||||
Adjusted EBITDA | $ | 223,300 | $ | 118,191 | $ | 834,918 | $ | 431,361 | ||||||
Adjusted EBITDA as a Percentage of |
11.1 | % | 8.5 | % | 9.7 | % | 8.4 | % |
---------------AT THE COMPANY---------------
VP, Communications and Investor Relations
(616) 365-1555

Source: UFP Industries, Inc.